Viewing Instructions 

 

This file has been indexed or bookmarked to simplify navigation between documents. If 

you are unable to view the document index, download the file to your local drive and 

open it using your PDF reader (e.g. Adobe Reader). 

 

 

 

· RESOLUTION NO. 9539

,~E CITY COUNCIL OF THE CITY OF· INDIO, CALIFORNIA, JTHE ISSUANCE AND SALE BY THE CITY OF ITS ASSESSMENT

.{0. 2002-1 LIMITED OBLIGATION REFUNDING IMPROVEMENT ,ERIES 2012; APPROVING AS TO FORM AND AUTHORIZING THE

AND DELIVERY OF CERTAIN DOCUMENTS IN CONNECTION ·"",."''"· AND APPROVING CERTAIN OTHER MATTERS RELATING

WHEREAS, the City of Indio (the ''City") has heretofore formed Assessment District No. 2002-1 (the "Assessmen~ District") and issued its Assessment District No. 2002-1 Limited Obligation Improvement Bonds, Series 2002, of which $3,535,000 in aggregate principal amount remain outstanding (the "Prior Bonds"); and

WHEREAS, the City Council of the City (the "City Council") has adopted a resolution entitled, "A Resolution of the City Council of the City of Indio, California, Declaring Its Intention to Issue Refunding Bonds for Assessment Districts Nos. 99-1, 2001-1, 2002-1, 2002-2, and 2002-3; Directing the Preparation of Report Pursuant to Section 9523 of the California Streets and Highways Code; Making Other Determinations Relating to the Refunding; and Directing Other Matters Relating Thereto" (the "Resolution of Intention"), on May 16, 2012 declaring its intention to issue bonds to refund the Prior Bonds and to levy reassessments within the Assessment District to secure such refunding bonds, under and pursuant to the Refunding Act of 1984 for 1915 Improvement Act Bonds (the "1984 Refunding Act"), as set forth in Division 11.5 (commenCing with Section 9500) of the California Streets and Highways Code; and

WHEREAS, the City Council, by a resolution entitled, "A Resolution of the City Council of the City of Indio, California, Approving a Reassessment Report Prepared in Connection with the Issuance of Refunding Bonds for Assessment Districts Nos. 99-1, 2001-1, 2002-1, 2002-2, and 2002-3; Confirming Reassessments for Such Refunding Bonfts; Making Other Fiil'dings in Connection Therewith; Ordering Refunding and Reassessments; and Directing and Approving Other Matters Relating Thereto," adopted on May 16, 2012, has approved a reassessment report (the "Reassessment Report") prepared by Willdan Financial Services in connection with the proposed refunding and reassessment pursuant to Section 9523 of the 1984 Refunding Act, made the findings required by Section 9525 of the 1984 Refunding Act, and confirmed and adopted the reassessment and reassessment diagram presented with the Reassessment Report; and

WHEREAS, the aforementioned reassessment diagram and a notice of reassessment shall be duly recorded in the manner provided by law, and the reassessments and interest thereon shall be collected on the assessment roll for the County of Riverside in the same manner and subject to the same remedies on default and to the payment of interest and penalties on the enforcement thereof as the original assessments in the Assessment District; and

WHEREAS, the City Council at this time desires to adopt this Resolution to authorize the issuance of the refunding bonds, which shall be designated "City of Indio, Assessment District No. 2002-1, Limited Obligation Refunding Improvement Bonds, Series 2012" (the "Bonds") and approve the execution and delivery of certain documents in connection with such issuance; and

-1-

WHEREAS, the City anticipates that the Bonds, upon issuah Financing Authority (the "Authority") pursuant to a Bond Purchas~\ into by and between the City and the Authority; and \

' '" WHEREAS, it is anticipated that the Authority will issue bonds (th[o 14 pursuant to the Marks-Roos Local Bond Pooling Act of 1985, as set forth iti, e ~ . of the California Government Code; and · \fCI'Jteh 0o

\ t"q \

WHEREAS, the sale proceeds of the Authority Bonds will be used for tht, Bonds and other bonds of the City and the Authority Bonds will be secured by f. made on the Bonds and the other bonds of the City so purchased by the Authority; fu

\

WHEREAS, to effect the refunding of the Prior Bonds, the City proposes to~' / Escrow Agreement with Union Bank, N.A.; in its capacity as the successor fiscal age'!. I Prior Bonds, substantially in the form presented to the City Coiincil and on file with t\ /

v Clerk. . . . ----~-~

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF INDIO DOES HEREBY RESOLVE, FIND, DECLARE AND ORDER AS FOLLOWS:

Section I. Recitals. The above recitals, and each of them, are true ~d correct.

Section 2. Authorization to Issue Bonds. The City Council approves and authorizes the issuance and sale of the Bonds, subject to the parameters set forth herein below.

Section 3. Fiscal Agent Agreement. The Fiscal Agent Agreement (the "Fiscal Agent Agreement"), proposed to be entered into by and between the City and the Fiscal Agent (defined in Section 4 below), in the form presented at this meeting and on file with the City Clerk of the City (the "City Clerk"), is hereby approved. Subject to Section 7 below, each of the Mayor, the Mayor Pro Tempore (in the Mayor's absence), the City Manager, any deputy of such officers (each, an "Authorized Officer"), acting singly, is hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Fiscal Agent Agreement in substantially said form, with such additions or changes as the Authorized Officer executing the same may approve (such approval to be conclusively evidenced by such Authorized Officer's exe~ution and delivery thereof).

Section 4. Appointment of Fiscal Agent. The' appointment of Union Bank, N.A., as fiscal agent (the "Fiscal Agent") under the Fiscal Agent Agreement is hereby approved.

Section 5. Escrow Agreement. The Escrow Agreement (the "Escrow Agreement"), proposed to be entered into by and between the City and Union Bank, N .A., as successor fiscal agent for the Prior Bonds, in the form presented at this meeting and on file with the City Clerk, is hereby approved. Each of the Authorized Officers, acting singly, is hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Escrow Agreement in substantially said form, with such additions or changes as the Authorized Officer executing the same may approve (such approval to be conclusively evidenced by such Authorized Officer's execution and delivery thereof).

Section 6. Bond Purchase Agreement. The Bond Purchase Agreement (the "Purchase Agreement") proposed to be entered into by and between the City and the Authority,

-2-

I

in the form presented at this meeting and on file with the City Clerk, is hereby approved. Each of the Authorized Officers, acting singly, is hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Purchase Agreement in substantially said form, with such additiOns or changes as the Authorized Officer executing the same may approve (such approval to' be conclusively evidenced by such A,uthorized Officer's execution and delivery thereof).

Section 7. Terms of Sale of Bonds: Each of the Authorized Officers, acting singly, is hereby authorized and directed to act on behalf of the City to establish and determine (i) the aggregate initial principal amount of the Bonds, which amount shall be less than the outstanding aggregate principal amount of the Prior Bonds on the date of issuance of the Bonds; (ii) the purchase price of the Bonds and the interest rates thereon, provided that the interest rate shall not exceed the rate permitted under Government Code Section 6592.5; and (iii) the final maturity of the Bonds, which shall not be on a date that is later than the scheduled final maturity date of the Prior Bonds.

Section 8. Continuing Disclosure Agreement. The Continuing Disclosure Agreement (the Continuing Disclosure Agreement") relating to the Authority Bonds, proposed to be entered into by and among the City, Union Bank, N.A., as trustee with respect to the Authority Bonds, and Willdan Financial Services, as Dissemination Agent, in the form presented at this meeting and on file with the City Clerk, is hereby approved. Each of the Authorized Officers, acting singly, is hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Continuing Disclosure Agreement in substantially said form, with such additions or changes therein as the Authorized Officer executing the same may approve (such approval to be conclusively evidenced by such Authorized Officer's execution and delivery thereof).

Section 9. Other Acts. The officers of the City are hereby authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all documents which they may deem necessary or advisable in order to effectuate the purposes of this Resolution, the Fiscal Agent Agreement, the Escrow Agreement, the Purchase Agreement and the Continuing Disclosure Agreement, and to assist the Authority with respect to the issuance and sale of the Authority Bonds, and any such actions previously taken by such officers are hereby ratified and confirmed.

Section 10. Effective Date.' This Resolution shall take effect Immediately upon adoption.

PASSED, APPROVED and ADOPTED this 161h day of May, 2012, by the following

vote:

AYES: Holmes, Torres, Ramos Watson, Wilso•u,.IMil~ NOES: None

GLENN

THIA HERNANDEZ, CM CITY CLERK

-3-

$3,410,000 CITY OF INDIO

ASSESSMENT DISTRICT NO. 2002-1 LIMITED OBLIGATION REFUNDING IMPROVEMENT BONDS

SERIES 2012

City oflndio I 00 Civic Center Mall Indio, California 9220 I

Ladies and Gentlemen:

BOND PURCHASE AGREEMENT

July 19, 2012

The Indio Finance Authority (the "Authority"), acting not as a fiduciary or agent for you, but on behalf of itself, offers to enter into this Bond Purchase Agreement" (this "Purchase Agreement") with the City oflndio (the "City"), which upon acceptance will be binding upon the Authority and the City. Attached hereto as Exhibit A is a Bond Purchase Contract (the "Authority Purchase Contract") by and be~ween the Authority and Compass Mortgage Corporation, an Alabama corporation (the "Purchaser"), whereby the Purchaser has agreed to purchase the Indio Finance Authority Assessment Revenue Refunding Bonds, Series 2012 (the "Authority Bonds"), from the Authority and the Authority has agreed to sell the Authority Bonds to the Purchaser. The agreement of the Authority to purchase the AD 2002-1 Refunding Bonds (as hereinafter defined) is contingent upon the Purchaser purchasing the Authority Bonds from the Authority, and upon the City satisfYing all of the requirements hereof and performing all conditions precedent, if any, to be performed by the City pursuant to the Authority Purchase Contract. Under context clearly requires otherwise, capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the hereinafter-mentioned Fiscal Agent Agreement.

Section 1. Purchase. Sale and Deliverv of the AD 2002-1 Refunding Bonds.

(a) Subject to the terms and conditions and in reliance upon the representations, warranties and agreements set forth herein, the Authority hereby agrees to purchase from the City and the City hereby agrees to sell to the Authority all (but not less than all) of the $3,41 O,O'oo aggregate initial principal amount of the City oflndio Assessment District No. 2002-1 Limited Obligation Refunding Improvement Bonds, Series 2012 (the "AD 2002-1 Refunding Bonds"), to be dated as of the Closing Date (as hereinafter defined), bearing interest at the rates and maturing on the dates and in the principal amounts set forth in Exhibit B hereto. The purchase price for the AD 2002-1 Refunding Bonds shall be $3,410,000.00 (the aggregate initial principal amount of the AD 2002-1 Refunding Bonds). The maturity schedule and redemption schedule shall be attached as Exhibit B to this Purchase Agreement. The AD 2002-1 Refunding Bonds shall be substantially in the form described in, shall be issued and secured under the provisions of, and subject to redemption as provided in, the Fiscal Agent Agreement, to be dated as of July I, 2012 (the "Fiscal Agent Agreement"), by and between the City and

I 12183·001911476163

Union Bank, N.A. (the "Fiscal Agent"), and the Refunding Act of 1984 for 1915 Improvement Act Bonds, as set forth in Division .11.5 (commencing with Section 9500) of the California Streets and Highways Code (the "1984 Refunding Act"). Pursuant to the Fiscal Agent Agreement and the 1984 Refunding Act, the AD 2002-1 Refunding Bonds shall be secured by reassessments to be levied by the City against the parcels in the Assessment District No. 2002-1 ("AD 2002-1 ;'), constituting a first lien and charge upon the real property within AD 2002-1. The net proceeds of the AD 2002-1 Refunding Bonds will be used to refund and defease certain bonds ereviously issued by the City for AD 2002-1 (the "Refunded Bonds") as described in the FisearAgent Agreement and the Escrow Agreement, dated as of July 1, 2012 (the "Escrow Agreement"), by and between the City and Union Bank N.A., as successor fiscal agent for the Refunded Bonds.

(b) Except as the City, the Authority and the Purchaser may otherwise agree, the City will deliver to the Authority and the Purchaser, at the offices of Richards Watson & Gershon, A Professional Corporation, as bond counsel ("Bond Counsel") in Los Angeles, California, or at such other location as may be mutually agreed upon by the Purchaser, the City and the Authority, the documents hereinafter mentioned and the City will deliver to or on the order of the Authority, at a location to be designated by the Authority, the AD 2002-1 Refunding Bonds, in definitive form, duly executed by the City and authenticated by the Fiscal Agent in the manner provided for in the Fiscal Agent Agreement, at 8:30 a.m., California time, June 20, 2012 (the "Closing Date"), and the Authority will accept such delivery and pay or cause to be paid the purchase price of the AD 2002-1 Refunding Bonds as set forth in paragraph (a) of this Section by official bank check or checks, by wire transfer or by other means, in any case payable in federal or other immediately available funds (such delivery and payment being herein referred to as the "Closing"). The AD 2002-1 Refunding Bonds· shall be in fully registered form and shall be registered in the name of the Authority or in accordance with instructions to be supplied to the City by the Authority at least two (2) business days prior to the Closing Date.

Section 2. Representations, Warranties and Agreements of the City. The City represents, warrants to, covenants and agrees with, the Authority that:

(a) The City is a municipal corporation duly organized and existing under the Constitution and the laws of the State of California, and has, and on the Closing Date will have, full legal right, power and authority to (i) enter into, execute, deliver and perform its obligations under this Purchase Agreement, the Escrow Agreement, and the Continuing Disclosure ' Agreement, to be dated as of July 26, 2012 (the "Continuing Disclosure Agreement"), by and among the City, Union Bank, N.A., as trustee with respect to the Authority Bonds, and Willdan Financial Services as the Dissemination Agent, (ii) issue the AD 2002-1 Refunding Bonds, and sell and deliver the AD 2002-1 Refunding Bonds to the Authority pursuant to the Fiscal Agent Agreement and as provided herein, and (iii) carry out, give effect to and consummate the transactions contemplated by this Purchase Agreement, the Authority Purchase Contract, the Escrow Agreement, the Fiscal Agent Agreement, and the Continuing Disclosure Agreement.

(b) The City has complied, and will at the Closing Date be in compliance, in all respects with the Fiscal Agent Agreement, the 1984 Refunding Act, this Purchase Agreement, and the Escrow Agreement, and the conditions precedent required to be performed by the City, if any, pursuant to the Authority Purchase Contract.

-2-12183·0019\1476163

(c) The City Council of the City has duly and validly: (i) adopted each of the Resolutions and approved and authorized the execution and delivery of the AD 2002-1 Refunding Bonds, this Purchase Agreement, the Fiscal Agent Agreement, and the Escrow Agreement and (ii) authorized and approved the performance by the City of its obligations

· contained in, and the taking of any and all action as may be necessary to carry out, give effect to and consununate the .transactions contemplated by, each of such documents.

(d) Except as described to the Authority and the Purchaser in writing, to the best of the City's knowledge, the City is not, in any respect material to the transactions referred to herein or contemplated hereby, in breach of or in default under, any Jaw or administrative rule or regulation of the State of California, the United States of America, or of any department, division, agency or instrumentality of either thereof, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the City is a party, and the performance by the City of its obligations under the AD 2002-1 Refunding Bonds, the Refunded Bonds, the Fiscal Agent Agreement, this Purchase Agreement, the Escrow Agreement, and the Continuing Disclosure Agreement and compliance with the provisions of each thereof, or the performance of the cqnditions precedent to be performed by the City, if any, pursuant to the Authority Purchase Contract, will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State of California, the United States of America, or of any department, division, agency or instrumentality of either thereof, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the City is a party, in any manner which would materially and adversely affect the performance by the City of its obligations under the AD 2002-1 Refunding Bonds, the Refunded Bonds, the Fiscal Agent Agreement, this Purchase Agreement, the Escrow Agreement, and the Continuing Disclosure Agreement or the performance of the conditions precedent to be performed by the City, if any, pursuant to the Authority Purchase Contract.

(e) Except as may be required under the "blue sky" or other securities laws of any jurisdiction, all approvals, consents, authorizations, elections and orders of, or filings or registrations with, any governmental authority, board, agency or commission having jurisdiction which would constitute a condition precedent to, or the absence of which would materially adversely affect, the performance by the City of its obligations hereunder and under the Fiscal Agent Agreement, the AD 2002-1 Refunding Bonds, the Refunded Bonds, the Escrow Agreement, and the Continuing Disclosure Agreyment and the performance of the conditions precedent to be performed by the City, if any, pursuant to the Authority Purchase Contract, have been or ~ill be obtained at the Closing Date and are or will be in full force and effect at the Closing Date.

I

(f) The AD 2002-1 Refunding Bonds are payable from the Reassessment Revenues which have been duly and validly authorized pursuant to the 1984 Refunding Act and the Reassessment Revenues will be fixed and levied in an amount which, together with other available funds, is required for the payment of the principal of, and interest on, the AD 2002-1 Refunding Bonds when due and payable, all as provided in the Fiscal Agent Agreement.

-3-12183.0019\14 76163

J

(g) The Fiscal Agent Agreement creates a valid pledge of, first lien upon and security interest in, the Reassessment Revenues and in the moneys in the Redemption Fund and Reserve Fund established pursuant to the Fiscal Agent Agreement, on the terms and conditions set forth in the Fiscal Agent Agreement.

(h) Except as disclosed to the Authority and the Purchaser in writing, no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory agency or public board or body to which the City is a party and has been served with a summons or other notice thereof, is pending, or to the knowledge of the City threatened, in any way affecting the existence of the City or the titles of their officers to their respective offices or seeking to restrain or to enjoin the issuance, sale or delivery of the AD 2002-1 Refunding Bonds or the Authority Bonds, the application of the proceeds thereof in accordance with the Fiscal Agent Agreement qr the Authority Bonds Inde~ture, or the collection or application of the Reassessment Revenues pledged or to be pledged to pay the principal of, and interest on, the AD 2002-1 Refunding Bonds, or the pledge thereof, or in any way contesting or affecting the validity or enforceability of the AD 2002-1 Refunding Bonds, the Authority Bonds, the Fiscal Agent Agreement, the Authority Bonds Indenture, this Purchase Agreement, the Escrow Agreement, the Continuing Disclosure Agreement, or any action of the City contemplated by any of such documents, or in any way contesting the powers of the City or the Authority or their authority with respect to the AD 2002-1 Refunding Bonds, the Authority Bonds, the Refunded Bonds, the Fiscal Agent Agreement, the Authority Indenture, this Purchase Agreement, the Escrow Agreement, the Continuing Disclosure Agreement, or any action of the City or, the Authority contemplated by any of such documents, or which contests the exclusion from gross income for federal income tax purposes of interest paid on the Authority Bonds or the exemption of interest paid on the AD 2002-1 Refunding Bonds, the Authority Bonds from State of California personal income taxation.

(i) Any certificate signed by any authorized officer or employee of the City authorized to do so shall be deemed a representation and warranty by the City to the Authority and the Purchaser as to the statements made therein.

G) The City will apply the proceeds of the AD 2002-1 Refunding Bonds in accordance with the Fiscal Agent Agreement and the Escrow Agreement.

(k) Until such time as moneys havebeen set aside in an amount sufficient to pay all then outstanding AD 2002-1 Refunding Bonds at maturity or to the date of redemption if redeemed prior to maturity, plus unpaid interest thereon and premium, if any, to maturity or to the date of redemption if redeemed prior to maturity, the City will faithfully perform and abide by all of the covenants, undertakings and provisions contained in the Fiscal Agent Agreement.

' The execution and delivery of this Purchase Agreement by the City shall constitute a representation to the Authority and the Purchaser that the representations and warranties contained in this Section 2 are true as of the date hereof.

Section 3. Conditions to the Obligations of the Authority.

-4-12183-0019\1476163

(a) The obligation of the Authority to accept delivery of and pay for the AD 2002-1 Refunding Bonds on the Closing Date shall be subject, at the option of the Authority, to the sale of the Authority Bonds, to the accuracy in all material respects of the representations and warranties on the part of the City contained herein, to the accuracy in all material respects of the statements of the officers and other officials of the City made in any certificates or other documents furnished pursuant to the provisions hereof or pursuant to the Authority Purchase Contract, and to the performance by the City of its obligations to be performed hereunder and the conditions precedent to be performed by the City, if any, under the Authority Purchase Contract at or prior to the Closing Date. The obligations of the Authority shall be further subject to the satisfaction of the conditions contained in Section 6 of the Authority Purchase Contract, and such conditions are incorporated herein and made a part hereof.

(b) If the City or the Authority shall be unable to satisfY the conditions to the obligations of the Authority to purchase, accept delivery of and pay for the AD 2002-1 Refunding Bonds contained in this Purchase Agreement, or if the obligations of the Authority to purchase, accept delivery of and pay for the AD 2002-1 Refunding Bonds shall be terminated for any reason permitted by this Purchase Agreement, this Purchase Agreement shall terminate and neither the Authority nor the City shall be under any further obligation hereunder, except that the respective obligations of the City and the Authority set forth in Section 4 hereof shall continue in full force and effect. '

Section'4. Expenses. The Authority agrees to pay, for itself and on behalf of the City, solely from and to the extent of proceeds of the Authority Bonds legally available therefor, all expenses incidental to the performance of the City's obligations hereunder, including but not limited to the cost of printing and delivering the AD 2002-1 Refunding Bonds to the Authority, the fees and disbursements of the Authority, Bond Counsel, accountants, engineers, appraisers, economic consultants and any other experts or consultants retained by the City or the Authority in connection with the issuance and sale of the AD 2002-1 Refunding Bonds.

Section 5. Undertakings of the City. The City agrees (a) to inform the Authority and the Purchaser, from time to time, upon the reasonable request of the Authority, of the amount then on deposit in the Reserve Fund and (b) to make available to the Authority, at the expense of the City, sufficient copies of its audited financial statements, if any;resolutions of its legislative body with respect to the AD 2002-1 Refunding Bonds, the Fiscal Agent Agreement, , and other documents relating to the AD 2002-1 Refunding Bonds and pertaining to the City or the Authority, to the extent that such documents are publicly available, as may be reasonably required from time to time for the prompt and efficient performance by the Authority of its obligations hereunder (except any portion of any such document which, by contract, is not subject to disclosure).

Section 6. Notices. Any notice or other communication to be given to the City under this Purchase Agreement may be given by delivering the same in writing to the City of Indio, 100 CiviC Center Mall, Indio, California 9220 I, Attention: City Manager; any notice or other communication to be given to the Authority under this Purchase Agreement may be· given by delivering the same in writing to the Indio Finance Authority 100 Civic Center Mall, Indio, California 9220 I, Attention: Chief Administrative Officer; any notice or 'other communication to be given to the Purchaser under this Purchase Agreement may be given by delivering the same

-5-12183·001911476163

in writing to Compass Bank, 999 18'h Street, Suite 2800, Denver, Colorado 80202, Attention: Matthew J. Chorske, Senior Vice President.

Section 7. Third Partv Beneficiary. Inasmuch as the Purchaser is purchasing the Authority Bonds from the Authority through a private placement, thereby enabling the iss~ce and sale of the Authority Bonds and the AD 2002-1 Refunding Bonds and the defeasance of the Refunded Bonds, the Purchaser is a third party beneficiary of this Purchase Agreement, and may enforce the same in all respects in the same manner and to the same extent as it may be enforced by the Authority.

Section 8. Parties in Interest. This Purchase Agreement is made solely for the benefit of the City, the Authority 'and the Purchaser (including any successors or assignees of the Purchaser) and no other person shall acquire or have any right hereunder or by virtue hereof.

Section 9. Survival of Representations and Warranties. The representations and warranties of the City shall not be deemed to have been discharged, satisfied or otherwise rendered void by reason of the Closing and regardless of any investigations made by or on behalf of the Authority or the Purchaser (or statements as to the results of such investigations) concerning such representations and statements of the City and regardless of delivery of and payment for the AD 2002-1 Refunding Bonds.

Section 10. Execution in Counternarts. This Purchase Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

r Section 11. No Prior Agreements. This Purchase Agreement supersedes and replaces

all prior negotiations, agreements and understandings among the parties hereto in relation to the sale of AD 2002-1 Refunding Bonds by the City.

Section 12. Effective Date. This Purchase Agreement shall become effective· and binding upon the respective parties hereto upon the execution of the acceptance hereof by the City and.shall be valid and enforceable as of the time of such acceptance.

[The remainder of this page is intentionally left blank.]

-6-12183-001911476163

Section 13. Governing Law. The validity, interpretation and performance of this Purchase Agreement shall be governed by the laws of the State of California.

Very truly yours,

INDIO FINANCE AUTHORITY

By.~ Treasurer

Accepted:

CITY OF INDIO

By: c~~ CityManag~

7 ' 12183-001911476163

Section 13. Governing Law. The validity, interpretation and performance of this Purchase Agreement shall be governed by the laws of the State of California.

I •

Very truly yours,

INDIO FINANCE AUTHORITY

By: Treasurer

Accepted:

CITY OF INDIO

By: ----~~~--------------­City Manager

/

7 12183-0019\1476163

\

. I EXHIBIT A

(Authority Bonds Purchase Agreement)

n

A-I 12183-0019\1476163

EXHIBITS (AD 2002-1 Purchase Agreement)

I. Maturity Schedule (

Maturity Date (Sentember 2} Princinal Interest Rate Yield

2027 $ 3,410,000 4.69% 4.69%

II. Redemption Provisions

· The AD 2002-1 Refunding Bonds will be subject to redemption prior to their stated maturity dates on any Interest Payment Date, in the manner provided in the Fiscal Agent Agreement, at the following redemption prices expressed as percentages of the principal amount of the AD 2002-1 Refunding Bonds to be redeemed, together with accrued interest to the date of redemption:

Redemntion Dates

Prior to September 2, 2017 September 2, 2017 and thereafter

Redemntion Prices

103% 100

Mandatory Sinking Fund Redemption. The Bonds are subject to redemption in part by lot from sinking fund payments made by the City, at a redemption price equal to the principal amount thereof to be redeemed with accrued interest thereon to 'the redemption date, without premium, in the aggregate respective principal amounts and on the respective dates as set forth in the following tables; nrovided, however, if some but not all of the Bonds have been redeemed pursuant to the Fiscal Agent Agreement, each future sinking fund payment with respect to the Bonds will be reduced on a pro rata basis (as nearly as practicable) in integral multiples of $1, so that the total amount of sinking fund payments with respect to the Bonds to be made subsequent to a redemption shall be reduced by an amount equal to the principal amount of the Bonds so redeemed, all as shall be designated pursuant to written notice filed by the City with the Fiscal Agent:

B-1 12183-0019\1476163

12183-001911476163

Redemption Date (September 2)

2012 2013 2014 2015 2016. 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 (maturity)

B-1

Principal Amount to be Redeemed

$225,000 155,000 160,000 165,000 170,000 185,000 190,000 200,000 210,000 215,000 225,000 240,000 250,000 260,000 275,000 285,000

1475356

FISCAL AGENT AGREEMENT

by and between

CITY OF INDIO

and

UNION BANK, N.A.,

as Fiscal Agent

Dated as of July 1, 2012

Relating to

$3,410,000 City oflndio

Assessment District No. 2002-1 Limited Obligation Refunding Improvement Bonds

Series 2012

ARTICLE I

ARTICLE II

ARTICLE III

ARTICLE IV

ARTICLE V

ARTICLE VI

1475356

TABLE OF CONTENTS

AUTHORITY AND DEFINITIONS ...... 2 Section 1.1. Authority for this Agreement... ......................................... 2 Section 1.Z:' Agreement for Benefit ofBondowners ............................ 2 Section 1.3. Definitions ......................................................................... 2 THE BONDS ......................................................................................... 10 Section 2.1. Section 2.2.

Principal Amount; Designation ....................................... I 0 Terms of Bonds ............................................................... II

Section 2.3. Redemption ................................................................... 12 Section 2.4. Form of Bonds .............................................................. 14 Section 2.5. Execution of Bonds ................................................ 14 Section 2.6. Transfer of Bonds ........................................................... 14 Section 2.7. Exchange ofBonds ......................................................... IS Section 2.8. Bond Register .................................................................. l5 Section 2.9. Temporary Bonds ........................................................... 15 Section 2.10. Bonds Mutilated, Lost, Destroyed or Stolen ................... 15 Section 2.11. Special Obligation ........................................................... 16 Section 2.12. Refunding ........................................................................ l6 ISSUANCE OF BONDS; APPLICATION OF PROCEEDS; REASSESSMENT FUND ............................................... 16 Section 3 .I. Issuance and Delivery of Bonds ..................................... 16 Section 3.2. Application of Proceeds of Sale of Bonds ...................... 16 Section 3.3. [Reserved] ....................................................................... 17 Section 3.4. Reassessment Fund ......................................................... !? REASSESSMENT REVENUES; REDEMPTION FUND; RESERVE FUND ................................................................................... 18 Section 4.1. Pledge of Reassessment Revenues .................................. 18 Section 4.2. Redemption Fund ........................................................... 19 Section 4.3. Reserve Fund .................................................................. 19 OTHER COVENANTS, REPRESENTATIONS AND DECLARATIONS OF THE CITY ......................................................... 21 Section 5 .I, Punctual Payment. ........................................................... 21

. Section 5.2. Special Obligation ........................................................... 21 Section 53. Extension ofTime for Payment.. ............................. : ...... 21 Section 5 4 Against Encumbrances.. ..... .. .. .. .. .. . ...... . . ......... 21 Section 5.5. Protection of Security and Rights of Owners ................. 21 Section 5.6. Collection of Reassessment Revenues ........................... 22 Section 5. 7. Further Assurances .......................................................... 22 Sectwn 5.8. Tax Covenants ............................................................... 22 Section 5.9. Covenant to Foreclose ..................................................... 22 INVESTMENTS; REBATE FUND; LIABILITY OF THE CITY ................................................................................... 23 Section 6.1. Section 6.2. Section 6.3.

Deposit and Investment of Moneys in Funds .............. 23 Rebate Fund, Rebate to United States ............................ 24 Liability of City ............................................................... 25

'

ARTICLE VII

ARTICLE VIII

ARTICLE IX

TABLE OF CONTENTS

Section 6.4. Employment of Agents by the City ................................ 25 THE FISCAL AGENT ......................................................................... 25 Section 7 .I. Appointment of Fiscal Agent.. ........................................ 25 Section 7 .2. Liability of Fiscal Agent .............................................. 26 Section 7.3. Information ................................................................... 28 Section 7 4 Reliance hy Fiscal Agent.. ............................................ 28 Section 7.5. Compensation; Indemnification .................................... 28 Section 7.6. Books and Accounts ....................................................... 28 MODIFICATION OR AMENDMENT OF THIS AGREEMENT ........................................................................................ 29 Section 8. 1. Section 8.2.

Amendments Permitted .............................................. 29 Owners' Meetings ........................................................... 30

Section 8.3. Procedure for Amendment with Written

Section 8.4. Section 8.5.

Consent of Owners .......................................................... 30 Disqualified Bonds .......................................................... 31 Effect of Supplemental Agreement.. ............................... 31

Section 8.6. Endorsement of Replacement of Bonds Issued after Amendments ................................................ 31

Section 8.7. Amendatory Endorsement of Bonds ............................... 31 Section 8.8. Consent of Fiscal Agent. ............................................... 31 Section 8.9. Requirements for Authority-owned Bonds ..................... 31 MISCELLANEOUS ............................................................................... 32 Section 9. I. Section 9 .2.

Section 9.3. Section 9.4.

Section 9.5. Section 9.6. Section 9.7.

· Section 9.8. Section 9.9. Section 9. I 0.

Section 9 .II. Section 9.12. Section 9. 13.

Benefits of Agreement Limited to Parties ...................... 32 Successors Deemed Included in All References to Predecessor. .............................................. 32 Discharge of Agreement ................................................. 32 Execution of Documents and Proof of Ownership by Owners ..................................................... 33 Waiver of Personal Liability ........................................... 33 Notices ........................................................................... 3 3 Severability .. . . .......... ........... ..... . .... .. . . .. .... . .. ... .. .... ... . . . . ... 34 Unclaimed Moneys ....... . ............................................... 34 Applicable Law........................................... .. ................ 3 5 Conflict with 1915 Act or 1984 Refunding Act .................................... ;........................................... . 3 5 Conclusive Evidence of Regularity ................................ 3 5 Payment on Business Day ............................................... 3 5 Counterparts .................................................................... 35

EXHIBIT A-FORM OF BOND............................................................................................. A -1

11 1475356

)

\

FISCAL AGENT AGREEMENT

THIS FISCAL AGENT AGREEMENT (the "Agreement") is made and entered into as of · July l, 20 l2, by and between the City of Indio, California, a municipal corporation (the ''City"'),

and Union Bank, N.A., a national banking association organized and existing under the laws of the United States of America, with a corporate trust office in Los Angeles, California, as fiscal agent (the "Fiscal Agent").

WITNESSETH:

WHEREAS, the City has heretofore formed Assessme11t District No. 2002-1 (the "Assessment District") and issued its Assessment District No. 2002-1 Lim1ted Obligation Improvement Bonds, Series 2002, of which $3,535,000 in ·aggregate principal amount remain outstanding (the "Prior Bonds"); and

WHEREAS; the City Council of the City (the "City Council") has adopted its Resolution No. 9535 on May 16, 2012, declaring its intention to issue bonds to refund the Prior Bonds and to levy reassessments within the Assessment· District to secure such refunding bonds under and pursuar)t to the Refunding Act of 1984 for 1915 Improvement Act Bonds (the "1984 Refunding Act"), as set forth in Division 11.5'(commencing with Section 9500) of the California Streets and Highways Code; and

·WHEREAS, the City Council, by its Resolution No. 9536, adopted on May 16,2012, has approved a reassessment report, entitled "City of Indio Reassessment District No. 2012-1 Reassessment Report, May 2012 (the ''Reassessment Report"), with respect to Reasses.sment Distnct No. 2012 (consisting of five underlying assessment districts including the Assessment District) and prepared by Willdan Financial Services in connection with the proposed refunding and reassessment pursuant to Section 9523 of the 1984 Refunding Act, made the findings required by Section 9525 of the 1984 Refunding Act, and confirmed and adopted the reassessment and reassessment diagram presented with the Reassessment Report; and

WHEREAS, the aforementioned reassessment diagram and a notice of reassessment shall be duly recorded in the manner provided by law, and the reassessments and interest thereon shall be collected on the assessment roll for the County of Riverside in the same manner and subject to the same remedies on default and to the payment of interest' and penalties on the enforcement thereof as the original assessments in the Assessment District; and

WHEREAS, by its Resolution No. 9539, adopted by the City Council on May 16, 2012, the City Counc1l has authorized and provided for the issuance and sale of its City of Indio, Assessment Dis.irict No. 2002-1, Limited Obligation Refunding Improvement Bonds, Series 2012 (the "Bonds"), pursuant to the 1984 Refunding Act; and

WHEREAS, the City anticipates that the Bonds, upon issuance, will be sold to the Indio Finance Authority (the "Authority"), as the initial purchaser thereof; and

r'

1475356

:

'

'

WHEREAS, it is anticipated that the Authority Will issue bonds (the "Authority floods") under pursuant to the Marks-Roos Local Bond Pooling Act of 1985, as set forth in Section 6584 et seq. of the California Government Code; and

WHEREAS, the sale proceeds of the Authority Bonds will be used for the purchase of the Bonds and other bonds of the City and the Authority Bonds will be secured by payments to be made on the Bonds and the other bonds of the City so purchased by the Authority; and

WHEREAS, the City has determined that all acts and proceedings required by law necessary to make the Bonds, when executed by the City, authenticated and delivered by the Fiscal Agent and duly issued, the valid, binding and legal limited obligations of the City, and to constitute this F1scal Agent Agreement a valid and binding agreement for the uses and purposes herein set forth in accordance with its terms, have been done and taken, and the execution and delivery of this Fiscal Agent Agreement have been in all respects duly authorized;

NOW, THEREFORE, in consideration of the covenants and provisions herein set forth and for other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto do hereby agree as follows:

ARTICLE I

AUTHORITY AND DEFINITIONS

Section 1.1. Authority for this Agreement. This Agreement is entered into pursuant to the provisions of the 1984 Refunding Act and the Resolution.

Section 1.2. Agreement for Benefit of Bondowners. The provisions, covenants and agreements herein set forth to be performed by or on behalf of the City shall be for the equal benefit, protection and security of the Owners of the Bonds. All of the Bonds, without regard to the time or times of their issuance or maturity, shall be of equal rank without preference, priority or distinction of any of the Bonds over any other thereof, except as expressly provided in or permitted by this Agreement. The Fiscal Agent and its officers and employees may become the owner of any of the Bonds with the same rights it would have if it were not Fiscal Agent.

Section 1.3. Definitions. Unless the context otherwise requires, the terms defined in this Section 1.3 shall, for all purposes of this Agreement, of any Supplemental Agreement, and of any certificate, opinion or other document herein mentioned, have the meanings herein specified. All references herein to "Articles," "Sections" and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Agreement, and the words "herein," "hereof," "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or subdivision hereof.

"Agreement" means this Agreement, as it may be amended or supplemented from time to time by any Supplemental Agreement entered into pursuant to the provisions hereof.

"Annual Debt Service" means, for each Bond Year, the sum of(a) the interest due on the Outstanding Bonds in such Bond Year, assuming that the Outstanding Bonds are retired as

2 1475356

7

scheduled, and (b) the principal amount of the Outstanding Bonds scheduled to be paid in such Bond Year.

"Assessment District" means the City's Assessment District No. 2002-1.

"Authorized Officer" means any officer or employee of the City authorized by the City Council or by an Authorized Officer to undertake the action referenced in this Agreement as required to be undertaken by an Authorized Officer.

"Authority" means the Indio Finance Authority.

"Authority Bonds" means the Indio Finance Authority Assessment Revenue Bonds'Series 2012, or such other bonds to be issued by the Authority, which bonds will be secured, in part, by the payments on the Bonds. I

"Authority Bonds Indenture" means the indenture (or similar instrument) pursuant to which the Authority. Bonds are issued.

"Authority Bonds Trustee" means the banking institution or trust company appointment by the Authority to act as trustee for the Authority Bonds pursuant to the Authority Bonds Indenture

"Bond Counsel" means the law firm of Richards, Watson & Gershon, A Professional Corporation, Los Angeles, California, or another firm or attorney of favorable reputation in the field of municipal bond law.

"Bond Year" means the penod beginning on the Closing Date and ending on September 2, 20 I 2 and thereafter the period beginning on each September 3 and ending on the following September 2.

"Bonds" means the City of Indio, Assessment District No. 2002-1 Limited Obligation Refunding Improvement Bonds, Series 2012, at any time Outstanding under this Agreement.

"Business Day'' means any day of the year, other than (i) a Saturday or Sunday, or (ii) a day on which banks in New York, New York and Los Angeles, California, and San Francisco, California are required or authorized to remain closed and on which the New York; Stock Exchange is closed.

"City" means the City of Indio.

''City Council" means the City Council of the City.

"Closing Date" means the date upon which there is an .exchange of the Bonds for the proceeds representing payment of. the purchase price of the Bonds by (or on behalf of) the Authority.

3

1

'

t

'

"Code" means the Internal Revenue Code of I 986 as in effect on the date of original issuance of the Bonds or (except as otherwise referenced herein) as it may be amended to apply to obligatiOns issued on the date of original issuance of the Bonds, together v.ith regulations promulgated, and official public guidance published, under the Code.

"Costs of Issu~nce" means all expenses incident to the calling, retiring or paying of the Prior Bonds and to the tssuance of the Bonds including, but not limited to, any bond counsel. financial advisors, underwriters, certified public accountants, and rating agency fees, printing and advertising costs, filing and recording fees, City administrative expenses, and charges of the Prior Bonds Fiscal Agent under the Escrow Agreement, the charges of the Fiscal Agent, and the costs of issuance of the Authority Bonds that are allocable to the Bonds.

"Gounty" means Riverside County, California.

"Debt Service" means the amount of interest and principal payable on the Bonds scheduled to be paid during the period of computation, excluding amounts payable during such period which relate to principal of the Bonds which are scheduled to be retired and paid 'before the beginning of such period.

"Escrow Agreement" means the Escrow Agreement proposed to be entered into by and between the City and the Prior Bonds Fiscal Agent in connection with the refunding of the Prior Bonds.

"Federal Securities" means any of the following which at the time of investment are determined by the City to be legal investments under the laws of the State of California for the moneys proposed to be invested therein:

(i) Cash; and

(ii) Direct general obligations of the United' States of America (includmg obligations issued or held in book entry form on the books of the Department of the Treasury of the United States of America), or obligations, the payment of principal of and mterest on which is unconditionally guaranteed by the United States of America

"Fiscal Agent" means Union Bank, N.A., the Fiscal Agent appointed by the City, acting as an independent fiscal agent with the duties and powers herein provided, its successors and assigns, and any other corporation or association which may at any time be substituted in its place, as provided in Section 7.1 hereof

'·Fiscal Year" means the twelve-month period extending from July I in a calendar year to June 30 of the succeeding year, both dates inclusive, or any other twelve-month period selected by the City as its official fiscal year period.

"Independent Financial Consultant" means a firm of certified public accountants, a financial consulting firm, a consulting engineering firm or an engineer which is not an employee of, or otherwise controlled by, the City.

4 1475356

"Interest Payment Dates" means March 2 and September 2 of each year, commencing September 2, 2012.

"Investment Earnings" means all interest earned and any gains and losses on the investment of moneys in any fund or account created by this Agreement excluding interest earned and gains and losses on the investment of moneys in the Rebate Fund.

)

"Maximum Annual Debt Service" means the amount determined by the City to be the largest Annual Debt ServiCe for any Bond Year after the calculation is made through the final maturity date of any Outstanding Bonds.

"Moody's" shall mean Moody's Investors Service, its successors and assigns.

"1984 Refunding Act" means the Refunding Act of 1984 for 1915 Improvement Act Bonds, as set forth in Division 11.5 (commencing with Section 9500) of the California Streets and Highways Code.

"1915 Act" means the Improvement Bond Act of 1915, as set forth m D!VIsJOn 10 (commencing with Section 8500) of the California Streets and Highways Code.

"Officer's Certificate" means a written certificate of the City signed by an Authorized Officer of the City.

"Outstanding." when used as of any particular time with reference to the' Bonds, means (subject to the provisions of Section 8.4 hereot) all Bonds except:

(i) Bonds theretofore canceled by the Fiscal Agent or surrendered to the Fiscal Agent for cancellation;

(ii) 'Bonds called for redemption which, for the reasons specified in Section 2.3(e) hereof, are no longer entitled to any benefii under this Agreement other than the right to receive payment of the redemption price therefor;

(iii) 9J hereof; and

Bonds paid or deemed to have been paid within the meaning of Section

(iv) Bonds in lieu of or ,in substitution for which other Bonds shall have been authorized, executed, 1ssued and delivered by the City and authenticated by the ,Fiscal Agent pursuant to this Agreement or any Supplemental Agreement.

"Owner" or "Bondowner" means any person who shall be the registered owner of any Outstanding Bond,

"Permitted Investments", means any of the following that at the time of investment are legal investments under the laws of the State of California for the moneys proposed to be invested therein:

5 1475356

(a) Direct obligations of the United States (including obligations issued or held in book-entry form on the books of the Department of the Treasury, and CATS and TIGRS) or obligations the principal of and.interest on which are unconditionally guaranteed by the United States.

(b) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following federal agencies and provided such obligations are backed by the full faith and credit of the United States (stripped securities are only permitted if they have been stripped by the agency itself):

I. U.S. Export-Import Bank ("Eximbank") Direct obligations or fully guaranteed certificates of beneficial ownership

2. Farmers Home AdministratiOn ("FmHA") Certificates of beneficial ownership

3 Federal Financing Bank

4. Federal Housing Administration Debentures ("FHA")

5. General Services Administration Participation certificates

6. Government National Mortgage Association ("GNMA") GNMA - guaranteed mortgage-backed bonds GNMA - guaranteed pass-through obligations

(participation certificates) (not acceptable for certain cash-flow sensitive issues)

7. Umted States Maritime Administration Guaranteed Title XI financing

8. United States Department of Housing and Urban Development Project Notes Local Authority Bonds New Communities Debentures

United States government guaranteed debentures United States Public Housing Notys and Bonds

United States government guaranteed public housing notes and bonds

(c) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following non-full faith and credit United States government agencies (stripped securities are only permitted if they have been stripped by the agency itself)·

1.475356

1. federal I Ionte Loan Bank System Senior debt obligations

6

2. Federal Home Loan Mortgage Corporation ("FHLMC") Participation Certificates Senior debt obligations

3. Federal National Mortgage Association ("FNMA") Mortgage-backed securities and senior debt obligations

4. Student Loan Marketing Association ("SLMA") Senior debt obligations ·

5. Resolution Funding Corporation obligations

6. Farm Credit System Consolidated system-wide bonds and notes

(d) Money market funds registered under the Federal Investment Company Act of 1940, whose shares are registered under the Federal Securities Act of 1933, and having a rating by S&P of "AAAm-G," :'AAA-m" or "AA-m" and if rated by Moody's rated "Aaa," "Aal" or "Aa2," including funds for which the Fiscal Agent or any of its affiliates (including any holding company, subsidiaries, or other affiliates) provides investment advisory or other management services, provided such funds satisfy the criteria herein contained.

(c) Certificates of deposit secured at all times by collateral described in (a) and/or (b) above. Such certificates must be issued by commercial banks (including affiliates of the Fiscal Agent), savings and loan associations or mutual savings banks. The collateral must be held by a third party and the bondholder.s must have a perfected first security interest in the collateral.

(f) Certificates of deposit, savings accounts, deposit accounts or money market deposits which. are fully insured by the Federal Deposit Insurance Corporation or secured at all times by collateral described in paragraphs (a) and/or (b) above, including those of the Fiscal Agent and its affiliates.

(g) · Investment agreements, including guaranteed investment contracts, forward purchase agreements and reserve fund put agreements.

(h) Commercial paper rated, at the time of purchase, "Prime- I" by Moody's and "A-I" or better by S&P.

(1) Bonds or notes issued by any state or municipality which are rated by Moody's and S&P in one of the two highest rating categories assigned by such agencies.

(j) Federal funds or bankers acceptances with a maximum term of one year of any bank (including those of the Fiscal Agent and its affiliates) which has an unsecured, uninsured and unguaranteed obligation rating of "Prime- I" or "A3" or better by Moody's and "A-I" or "A" or better by S&P.

7 1475356

• '

(k) Repurchase agre7ments for 30 days or less must follow the following criteria. Repurchase agreements which provide for the transfer of securities from a dealer bank or securities firm (seller/borrower) to a municipal entity (buyer/lender), and the transfer of cash from a municipal entity to the dealer bank or securities firm with an agreement that the dealer bank or securities firm will repay the cash plus a yield to the municipal entity in exchange for the securities at a specified date, and

147;356

I. Repurchase agreements must be between the municipal entity and a dealer bank or securities firm

A. Primary dealers on the Federal Reserve reporting dealer list which are rated "A" or better by S&P and Moody's, or

B. Banks rated "A" or above by S&P and Moody's.

2. The written repurchase agreements contract must include the following:

A. Securities which are acceptable for transfer are:

(I) Direct United States governments, or

(2) Federal agencies backed by the full faith and credit of the United States government (and FNMA & FHLMC)

B. The term of a repurchase agreement may be up to 30 days

C. The collateral must be delivered to the City, the Fiscal Agent (if the Fiscal Agent is not supplying the collateral) or third party acting as agent for the Fiscal Agent (if the Fiscal Agent is supplying the collateral) before/simultaneous with payment (perfection by possession of certificated securities).

D. Valuation of Collateral

(!) The securities must be valued weekly, marked-to-market at current market price plus accrued interest

(2) The value of collateral must be equal to I 04% of the amount of cash transferred by the municipal entity to the dealer bank or security firm under the repo plus accrued interest. If the value of securities held as collateral slips below 104% of the value of the cash transferred by municipality, then addltional cash and/or acceptable securities must be transferred. If, however, the securities used as collateral are FNMA or FHLMC, then the value of collateral must equal I 05%.

8

3. A !~gal opinion must be delivered to the municipal entity to the effect that the repurchase agreement meets guidelines under state law for legal investment of public funds. ·

(!) Any state administered pool investment fund in which the City is statutorily permitted or required to invest will be deemed a permitted investment, including, but not limited to the Local Agency Investment Fund in the treasury of the State. ·

"Principal Office". means the office of the Fisca!' Agent in Los Angeles, California, at which at any particular time corporate trust business shall )Je administered, or such other office as the Fiscal Agent shall designate.

''Prior Bonds" means all of the remaining outstahdmg Assessment District No. 2002-1 Limited Obligation Improvement Bonds, Series 2002.

"Prior Bonds Fiscal Agent Agreement" means the Fiscal Agent Agreement, dated as of May I, 2002, by and between the City and BNY Western Trust Company, the predecessor to the Prior Bonds Fiscal Agent, pursuant to which the Prior Bonds were issued.

'· "Prior Bonds Fiscal Agent" means Union Bank, N.A., in its capacity as the successor

fiscal agent under the Prior Bonds Fiscal Agreement.

"Reassessment Fund" means the fund by that name established and maintained by the Fiscal Agent pursuant to Section 3.4(a).

"Reassessment Preoavment Account'' means the account by that name in the Reassessment Fund established and maintained by the Fiscal Agent pursuant to Section 3.4(a).

"Reassessment Revenues" means the revenues received by the City in each Fiscal Year from the collection of the annual. installments of the unpaid Reassessments, prepaym~nts of any unpaid Reasse~sments, and proceeds from the sale of property for delinquent Reassessment installments.

"Reassessments" means the unpaid assessments levied on properties within the Assessment District which secure the payment of Debt Service, pursuant to the 1984 Refunding Act, including without limitation Section 9538 thereof, and the Reassessment Report (as defined in the recitals to this Agreement) approved by the City Council thereunder.

"Rebate Fund" means the fund by that name established pursuant to Section 6.2.

"Record Date" means the fifteenth (15th) day of the .month next preceding the applicable Interest Payment Date whether or not such day is a Business Day.

"Redemption Fund" means the fund by that name established pursuant to Section 4.2(a).

"Registration Books" means the records maintained by the Fiscal. Agent pursuant to SectiOn 2.8 hereof for the registration and transfer of ownership of the Bonds.

9 1475J56

"Reserve Fund" means the fund by that name established and maintained by the Fiscal Agent pursuant to Section 4.3(a).

"Reserve Requirement" means, on any date in any Bond Year, the least of (i) I 0 percent of the proceeds of the sale of the Bonds (within the meaning of the Code), (ii) Maximum Annual Debt Service; or (iii) 125 percent of average Annual Debt Service on the Bonds for the Bond Years after the calculation is made through the final maturity date of any Outstanding Bonds, as determined by the City.

"Resolution of Intention" means Resolution No. 9535 of the City Council, referred to in the recitals hereof.

"Resolution of Issuance" means Resolution No. 9539 of the City Council, referred to in the recitals hereof.

~

"Resolutions" means, collectively, the Resolution of Intention and the Resolution of Issuance.

"S&P" means Standard & Poor's, a division of The McGraw Hill Companies, Inc., and its successors and assigns.

"State" means the State of California.

"Supplemental Agreement" means a Supplemental Agreement entered into by the City and the Fiscal Agent for the purpose of modifying or amending this Agreement or the rights and obligations of the City and the Owners pursuant to Section 8.1 hereof.

"Tax Certificate" means the Certificate Regarding Compliance with Certain Tax Matters (or similar document) pertaining to the use and investment of proceeds of a series of Bonds, executed and delivered by a duly authorized officer of the City on the related Delivery Date, including any and all exhibits and attachments thereto.

"Tax-exempt" means, with respect to interest on any obligations of a state or local government, including the interest on the Bonds, that such interest is excluded from gross income for federal income tax purposes whether or not such interest is includable as an item of tax preference or otherwise includable directly or indirectly for purposes of calculating tax liabilities, including any alternative minimum tax, under the Code.

,, ARTICLE II

THE BONDS

Section 2.1. Principal Amount; Designation. The Bonds in the aggregate principal amount of $3,410,000 are hereby authorized to be issued by the City for the Assessment District under and subject to the terms of the Resolutions, this Agreement, the 1984 Refunding Act and

10 1475356

other applicable laws of the State. The Bonds shall be designated "City of Indio, Assessment District No. 2002-1, Limited Obligation Refunding Improvement Bonds, Series 2012," and shall be secured by the Reassessments.

Section 2.2. Tenns of Bonds. (a) The Bonds. The Bonds shall be issued as fully registered bonds, without coupons, in the denominations of $1 or any integral multiple thereof. The Bonds shall be lettered and numbered m a customary manner as determined by the City. The Bonds shall be dated the Closing Date.

(b) Maturities. The Bonds shall mature and become payable on September 2, 2027, as follows:

Maturity Date (September 2)

2027

Principal Amount

$3,410,000

Interest Rate

(per annum)

4.69%

(c) Interest. The Bonds shall bear interest at the rates set forth in subsection (b) above which shall be payable on the Interest Payment Dates in each year. Interest shall be calculated on the basis of a 360-day year composed of twelve 30-day months. Each Bond shall bear interest from the Interest Payment Date next preceding the date of authentication thereof unless (i) it is authenticated after a Record Date and before the close of business on the next Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or (ii) it is authenticated on or befor~ the Record Date preceding the first Interest Payment Date, in which event it shall bear interest from the Closing Date; provided, however, that if at the time of authentication of a Bond, interest is in default thereon, such Bond shall bear interest from the Interest Payment Date to which interest has previously been.paid or made available for payment thereon or from the Closing Date, if no interest has previously been paid or made available for payment thereon.

(d) Method of Payment. Interest on the Bonds is payable by check of the Fiscal Agent mailed by first class mml, postage prepaid, on each Interest Payment Date, until the principal aJllount of a Bond has been paid or made available for payment, to the registered Owner thereof at such registered Owner's address as it appears on the Registration Books at the close of business on the Record Date preceding the Interest Paym~nt Date or by wire transfer made on such Interest Payment Date upon written instructions of any owner of $500,000 or more in aggregate principal amount of Bonds delivered to the Fiscal Agent prior to the applicable Record Date.. The principal of the Bonds a11d any premium on the Bonds are payable in lawful money of the United States of America upon surrender of such Bonds at the Principal Office of the Fiscal Agent. Notwithstanding the foregomg, so long as the Authority is the registered Owner of the Bonds, interest on the Bonds shall be paid by wire transfer to the Trustee under the Authority Bonds Indenture, as assignee of the Authority pursuant to Section 4.0 I thereof. All Bonds paid by the Fiscal Agent pursuant to this subsection shall be canceled and destroyed by the Fiscal Agent.

II 1475356

Section 2.3. Redemption.

(a) Mandatory Sinking Fund Redemption. The Bonds are subject to redemption in part by lot from sinking fund payments made by the City, at a redemption price equal to the pnncipal amount thereof to be redeemed with accrued interest thereon to the redempt10n date, without premium, in the aggregate respective principal amounts and on the respective dates as set forth in the following tables; provided, however, if some but not all of the Bonds have been redeemed pursuant to Section 2 3(b ), each future sinking fund payment with respect to the Bonds will be reduced on a pro rata basis (as nearly as practicable) in integral multiples of$1, so that the total amount of sinking fund payments with respect to the Bonds to be made subsequent to a Section 2.3(b) redemption shall be reduced by an amount equal to the principal amount of the Bonds so redeemed, all as shall be designated pursuant to written notice filed by the City with the Fiscal Agent:

Redemption Date · (September 2)

2012 2013 . 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 (maturity)

Principal Amount to be Redeemed

$225,000 155,000 160,000 165,000 170,000 185,000 190,000 200,000 210,000 215,000 225,000 240,000 250,000. 260,000 275,000 285,000

(b) RedemptiOn. The Bonds are subject to redemption prior to their stated maturity dates on any Interest Payment Date, as selected by the City, in integral multiples of $1, at the option of the City from moneys derived by the City from any source or pursuant to Section 3.4 or 4.3, at the following redemption prices expressed as percentages of the principal amount of the Bonds to be redeemed, together with acc.rued interest to the date of redemption:

Redemption Dates

Prior to September 2, 2017 September 2, 2017 and therea:fter

Redemption Prices

1Q3% 100

(c) Notice to Fiscal Agent. An Authorized Officer shall give the Fiscal Agent written notice of the City's intention to redeem Bonds not less than forty-five (45) days prior to the

12 1475356

applicable redemption date unless a shorter time is acceptable to the Fiscal Agent in its sole discretion specifying the principal amount and maturities of Bonds to be redeemed.

(d) Redemption Procedure by Fiscal Agent. The Fiscal Agent shall cause notice of any redemption to be provided by registered or certified mail or by personal service at least thit1y (30) days prior to the date fixed for redemp\ion, to the respective registered Owners of any Bonds designated for redemption, at their addresses .appearing on the Regtstratton ·Books. In addition to the foregoing, if the Regist~ation Books shows that any of the Bonds subjec! to redemption is then owned by a person or, entity other than the Authority, the Fiscal Agent shall send a notice of redemption at least thirty (30) days prior to the redemption date,. by registered or certified mail, postage prepaid, or by overnight delivery service to the registered Owners of the Bonds. ·

Such notice shall state the date of such notice, the date of issue of the Bonds, the place or places of redemption, the redemption date, the redemption price and, if less than all of the then Outstanding Bonds are to be called f~r redemption, shall designate the CUSIP numbers (if any) and Bond numbers of the Bonds·to be redeemed, or shall state that all Bonds between two stated Bond 'numbers, both inclusive, are to be redeemed or that all of the Bonds of one or more maturities have been called for redemption, shall state as to any Bond called for redemption in part the portion of the principal of the Bond to be redeemed, shall require that such Bonds be then surrendered at the Principal Office of the Fiscal Agent for redemption at the said redemption price, and shall state that further. interest on such 'Bonds will not accrue from and after the redemption date. The cost ofthe mailing of any such redemption notice shall be paid by . (

the Ctty.

Neither failure to receive any redemption notice nor any defect in such redemption notice so given shall affect the sufficiency of the proceedings for the redemption of such Bonds. Upon the payment of the redemption price of Bonds being redeemed, each check or other transfer of funds issued for such purpose shall, to the extent practicable, identify, bylissue, maturity and Bond number, the Bonds being redeemed with the proceeds of such check or other transfer.

Except as otherwise provided in Section 3.4(d), in the event of a redemption of Bonds, the Fiscal Agent shall deposit in the Redemption Fund moneys provided by the City in an am0unt equal to the redemption price. of the Bonds being redeemed on or before the fifteenth (I 5th) day of the month preceding the Interest Payment Date upon which such Bonds are to be redeemed.

Upon surrender of Bonds redeemed in part only, the City shall execute and the Fiscal Agent shall authenticate and deliver to the Owner, at the expense of the City, a new Bond or Bonds, of the same maturity, of authorized denominations in aggregate principal amount equal to the unredeemed portion of the Bond or Bonds. Such partial redemption shall be valid upon payment of the amount required to be paid to such Owner, and the CitY and the Fiscal Agent shall be released and discharged thereupon from all liability to the ·extent of such payment.

(e) Effect of Redemption. From and after the date fixed for redemption, if funds available for the payment of the redemption prices of the Bonds called for redemption shall have

13 1475356

been deposited in the Redemption Fund or the Reassessment Prepayment Account, as applicable, such Bonds or portions thereof shall cease to be entitled to any benefit under this Agreement other than the right to receive payment of the redemption price, and interest shall cease to accrue on the Bonds or portions thereof to be redeemed on the redemption date specified in the notice of redemption.

All Bonds redeemed by the Fiscal Agent pursuant to this Section 2.3 shall be canceled and destroyed by the Fiscal Agent.

Section 2.4. Form of Bonds. The Bonds, the Fiscal Agent's certificate of authentication and the assignment to appear thereon shall be substantially in the forms, respectively, set forth m Exhibit A attached hereto and by this reference incorporated herein, with necessary or appropriate variations, omissions and insertions as permitted or required by this Agreement.

Section 2.5. Execution of Bonds. The Bonds shall be executed by the manual or facsimile signatures of the Treasurer and the City Clerk of the City, who are in office on the date of this Agreement or at any time thereafter. If any officer whose signature appears on any Bond ceases to be such officer before delivery of the Bond to the Owner, such signature shall nevertheless be as effective as if the officer had remained in office until the delivery of the Bond to the Owner. Any Bond may be signed and attested by such persons as at the actual date of the execution of such Bond shall be the proper officers of the City notwithstanding that on the nominal date of such Bond any such person shall not have been such officer of the City.

Only such Bonds as shall bear thereon a certificate of authentication in substantially the form set forth in Exhibit A hereto, manually executed by the Fiscal Agent, shall be valid or obligatory for any purpose or entitled to the benefits of this Agreement, and such certificate of authentication of the Fiscal Agent shall be conclusive evidence that such Bonds have been duly authenticated, registered and delivered hereunder, and are entitled to the benefits of this Agreement.

Section 2.6. Transfer of Bonds. Any Bond may, iri accordance with its terms, be transferred, upon the books required to be kept pursuant to the provisions of Section 2.8 hereof, by the person in whose name it is registered, in person or by his or her duly authorized attorney, upon surrender of such Bond for cancellation, accompanied by delivery of a duly executed written instrument of transfer in a form acceptable to the Fiscal Agent. The cost for any services rendered or any expenses incurred by the Fiscal Agent in connection with any such transfer shall be paid by the City. The Fiscal Agent shall collect from the Owner requesting transfer of a Bond any tax or other governmental charge required to be paid with respect to such transfer.

Whenever any Bond or Bonds shall be surrendered for transfer, the City shall execute and the Fiscal Agent shall authenticate and deliver a new Bond or Bonds of like aggregate principal amount of authorized denominations.

14 1475356

No transfers of Bonds shall be required to be made (a) during the fifteen (15) days preceding the date established by the Fiscal Agent for selection of Bonds for redemption, or (b) with respect to Bonds which have been selected for redemption.

Section 2.7. Exchange of Bonds. Bonds may be exchanged at the Principal Office of the Fiscal Agent only for a like aggregate principal amount\ of Bonds of authonzed denominations and of the same maturity. The cost for any services rendered or any expense incurred by the Fiscal Agent m connection with any such exchange shall be paid by the Ctty. The Fiscal Agent shall collect from the Owner requesting exchange of a Bond any tax or other governmental charge required to be paid with respect to such exchange.

No exchanges of Bonds shall be required to be made (i) during the fifteen (15) days preceding the date established by the Fiscal Agent for selection of Bonds for redemption, or (ii) with respect to Bonds which have been selected for redemption.

Section 2.8. Bond Register. The Fiscal Agent shall keep, or cause to be kept, sufficient books for the registration and transfer of the Bonds which books shall show the series, number, CUSIP identification number (if any), date of issuance, amount, rate of interest and Owner .of each Bond and shall at all times be open to inspection by the City during regular business hours. upon reasonable notice; and, upon presentation for such purpose, the Fiscal Agent shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on said books, the ownership of the Bonds as hereinbefore provided.

Section 2.9. Temporary Bonds. The Bonds may be initially issued in temporary form exchangeable for definitive Bonds when ready for delivery. The temporary Bonds may be printed, lithographed or typewritten, shall be of such denominations as may be determined by the City, and may contain such reference to any of the provisions of this Agreement as may be appropriate. Every temporary Bond shall be executed by the City upon the same conditions and in substantially the same marmer as the definitive Bonds. If the City issues temporary Bonds, it will execute and furnish definitive Bonds without delay and thereupon the temporary Bonds shall be surrendered, for cancellation, in exchange for the definitive Bonds at the Principal Office of the Fiscal Agent or at such other location as the Fiscal Agent shall designate, and the Fiscal Agent shall authenticate and deliver in exchange for such temporary Bonds an equal aggregate principal amount of definitive Bonds of authorized denominations. Until so exchanged, the temporary Bonds shall be entitled to the same benefits under this Agreement as definitive Bonds authenticated and delivered hereunder.

Section 2.1 0. Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond shall become mutilated, the City, at the expense of the Owner of said Bond, shall execute, and the Fiscal Agent shall authenticate and deliver, a replacement Bond of like tenor and principal amount in exchange and substitution for the Bond so mutilated, but only upon surrender to the Fiscal Agent of the Bond so m~tilated. Every mutilated Bond so surrendered to the Fiscal Agent shall be canceled and destroyed by the Fiscal Agent. If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Fiscal Agent and, it' such evidence be satisfactory to it and indemnity satisfactory to it shall be given, the City, at the expense of the Owner, shall execute, and the Fiscal Agent shall authenticate and deliver, a

J

1475356 15

replacement Bond of like tenor and principal amount in lieu of and in substitution for the Bond so lost, destroyed or stolen. The City or Fiscal Agent may require payment of a sum not exceeding the actual cost of preparing each replacement Bond delivered under this Section 2.10 and of the expenses which may be incurred by the City and the Fiscal Agent for the preparatiOn, execution, authentication, and delivery thereof. Any Bond delivered under the provisions of this Section 2.10 in replacement of any Bond alleged to be lost. destroyed or stolen shall constitute an original additional contractual obligation of the City whether or riot the Bond so alleged to be lost, destroyed or stolen is at any time enforceable by anyone, and shall be equally and proportionately entitled to the benefits of this Agreement with all other Bonds issued pursuant to this Agreement.

Section 2.11. Special ObligatiOn. All obligations of the City under this Agreement and the Bonds and interest thereon shall be special obligations of the City, payable solely from the Reassessment Revenues. Neither the faith and credit nor the taxing power of the City or the State of California or any political subdivision thereof is pledged to the payment of the Bonds or the mterest thereon and no Owner of the Bonds may compel the exercise of any taxing power by the City or force the forfeiture of any of its property. The principal of, and premium (if any) and interest on the Bonds are not a debt of the City nor a legal or equitable pledge, charge, lien or encumbrance upon any of its property, or upon any of its income, receipts or revenues.

Section 2.12. Refunding. At any time necessary or appropriate, the City may issue bonds to refund all or any portion of the Bonds as permitted by and in accordance with law including, but not limited to, the 1984 Refunding Act; provided, any such refunding shall be undertaken in connection with the optional redemption of all of the Authority •Bonds then Outstanding, or, with the consent of all of the Owners of the Bonds then Outstanding, may result in the optional redemptiOn of a portion of the Authority Bonds then Outstanding.

ARTICLE III

ISSUANCE OF BONDS; APPLICATION OF PROCEEDS; REASSESSMENT FUND

Section 3 .I. Issuance and Delivery of Bonds. At any time after the execution and delivery of this Agreement, the City may issue the Bonds in the aggregate principal amount set forth in Section 2.1 hereof and deliver the Bonds to the Authority, as the original purchaser. The Authorized Officers of the City are hereby authorized and ~directed to deliver any and all documents and instruments necessary to cause the issuance of the Bonds in accordance with the provisions of the 1915 Act, the 1984 Refunding Act, the Resolutions and this Agreement and to do and cause to be done any and all acts and things necessary or convenient for delivery of the Bonds to the Authority.

Section 3 .2. Aoolication of Proceeds of Sale of Bonds. The proceeds of the sale of the Bonds, in the amount of $3,410,000, shall be deposited as follows:

(a) The Fiscal {\gent shall deposit$1,663.74 in the Redemption Fund established hereunder; and ··

16 I475356

(b) The Fiscal Agent shall' transfer the remaining $3,408,336.26 to the Prior Bonds Fiscal Agent for deposit pursuant to ,the Escrow Agreement.

In addition, moneys in the amount o($304,376.50 transferred on the Closing Date from the Reserve Fund held under the Prior Bonds Fiscal Agent Agreement shall be deposited by the Fiscal Agent into the Reserve Fund established hereunder, which amount is equal to the Reserve Requirement as of the Closing Date.

Section 3 .3. [Reserved]

Section 3.4. Reassessment Fund. (a) Establishment of Reassessment Fund. There is hereby established, as a separate account to be held by the Fiscal Agent. the "Reassessment Fund" to the credit of which the Fiscal Agent shall deposit all Reassessment Revenues received by the Fiscal Agent from the City except for the prepayment of reassessments. Upon receiving any Reassessment Revenues from the County, the City shall retain the amounts included therein up to the amount budgeted and assessed pursuant to Section 9523 ofthe 1984 Refundmg Act and Sections 8682.1 and 8682 of the 1915 Act, or a portion thereof, for payment of the City's expenses associated with the collection of the Reassessment Revenues and payment of the annual costs associated with the registration of the Bonds and the other duties of the Fiscal Agent provided for herein, and transfer ·the remainder thereof to the Fiscal Agent for deposit in the Reassessment Fund. Moneys in the Reassessment Fund shall be held by the Fiscal Agent for the benefit of the City and the Owners of the Bonds, as hereinafter provided, shall be disbursed as provided below and, pending disbursement, shall be s·ubject to a lien in favor of the Owners of the Bonds. The Fiscal Agent shall establish and maintain within· the Reassessment Fund a "Reassessment Prepayment Acco\illt."

(b) Disbursements. Not later than the third Business Day preceding each Interest Payment Date, the Fiscal Agent shall withdraw from the Reassessment Fund and deposit in the Redemption Fund the amount which is necessary to pay Debt Service on the Interest Payment Date.

(c) Investment. Moneys 'in the Reassessment Fund shall be invested and deposited in accordance with Section 6. I hereof. Investment Earnings shall be retained in the Reassessment Fund to be used for the purposes of such fund.

(d) Prepayment of Reassessments. Amounts received from property owners t.n the Assessment District as prepaym,ents of the Reassessment pursuant to the 1915 Act shall be deposited by the City Treasurer and held by the Fiscal Agent in the Reassessment Prepayment Account for application pursuant to Section 3.4(e). The City shall identify to the Fiscal Agent in

· writing the amount of such prepayment. The Fiscal Agent also shall deposit in the Reassessment Prepayment Account amounts transferred thereto from the Reserve Fund pursuant to Sections 4.3(d) and 4.3(f). Amounts in the Reassessment Prepayment Account shall be used to pay the principal of and re&:mption premium on Bonds to be called for redemption as provided m the next sentence. Subject to the priority of disbursements set forth in Section 3.4(e), whenever and to the extent monies are on deposit in the Reassessment Prepayment Account are sufficient to pay on redemption the principal of Bonds in integral $1 amounts plus the redemption premium

17 1475356

thereon (if any), the Fiscal Agent shall advance the matlirity 9f and ·call Bonds for redemption pursuant to Section 2.3(b ). On or after each redemption date, upon presentation and surrender thereof, the Fiscal Agent shall pay the principal of and redemption premium on each Bond the maturity of which has been so advanced from monies in the Reassessment Prepayment Account. Interest accrued on each such Bond shall be paid from monies in the Redemption Fund.

(e) Application of Prepaid Reassessments. Upon receiving a prepayment of a Reassessment, the City Treasurer shall transfer it to the Fiscal Agent for deposit in the Reassessment Prepayment Account. All prepayments may be commingled in a single subaccount within the Reassessment Prepayment Account. From the Reassessment Prepayment Account (but solely from money representing prepayment on Reassessments described in Section 3.4(d)), the Fiscal Agent shall make disbursements in the following priority as specified by the City as follows: ·

\ (i) The administrative fee, in the amount included in such prepayment

amount pursuant to Section 8766.5 of the 1915 Act for the City's costs of administering the prepayment and the related redemption of Bonds and specified to the Fiscal Agent by the City, shall be transferred to the City for deposit in the general fund of the City.

(ii) Delinquent principal, interest, and penalties on the Reassessment being prepaid shall be transferred to the Redemption Fund. If the Reserve Fund has been depleted on account of the delinquencies, the delinquent amounts and penalties shall be transferred instead to the Reserve Fund.

(iii) The installment of principal on the Reassessment being prepaid due in the Fiscal Year in which prepayment is made shall be transferred to the Redemption Fund.

(iv) Interest accrued on the Reassessment to the next available redemption date with respect to the Bonds shall be transferred to the Redemption Fund.

(v) The balance in the Reassessment Prepayment Account shall be used to redeem Bonds on the next available redemption date as provided in Section 2.3(b) hereof. The amount of Bonqs to be retired shall be the maximum for which principal and redemption premium may be paid in full from the Reassessment Prepayment Account Accrued interest on Bonds to be retired shall be paid from the Redemption Fund. 1

ARTICLE IV

REASSESSMENT REVENUES; REDEMPTION FUND; RESERVE FUND

Section 4.1. Pledge of Reassessment Revenues. The Bonds shall be secured by a pledge (which pledge shall be effected in the manner and to the extent herein provided) of all of the Reassessment Revenues and all moneys deposited in the Redemption Fund, the Reassessment Fund, and the Reserve Fund. The Reassessment Revenues and all moneys deposited into such funds are hereby dedicated m their entirety to the payment of the principal of the Bonds, and interest and any premium on, the Bonds as provided herein, until all of the Bonds

18 1475356

have been paid and retired or until moneys or Federal Securities have been set aside irrevocably for that.purpose in accordance with Section 9.3 hereof. ·

Section 4.2. Redemption Fund. (a) Deposits. There is hereby established, as a separate account to be held by the Fiscal Agent, the "Redemption Fund" to the credit of which deposits shall be made as required by the provisions of this Agreement. Moneys in the Redemption Fund shall be held by the Fiscal Agent for the benefit of the Owners of the Bonds, shall be disbursed for the .payment of the principal of, and interest and any premium on, the Bonds as provided below, and, pending such disbursement, shall be subject to a lien in favor of the Owners of the Bonds

(b) Disbursements. On each Interest Payment Date, the Fiscal Agent shall withdraw from the Redemption Fund and pay to the Owners of the Bonds the principal of and interest and

-any premium then due and payable on the Bonds on the Interest Pay111ent Date.

If, on any Interest Payment Date, there will be insufficient funds in the RedemptiOn Fund to make the payments provided for in the first paragraph of this Section 4.2(b ), the Fiscal Agent shall apply the available funds first to the paym~nt of interest\ on the Bonds, and then to the payment of principal due on the Bonds.

As provided in the form of the Bonds attached hereto as Exhibit A, the City Council has determined, pursuant to Section 8769(b) of the California Streets and Highway Code that the City will not obligate itself to advance available funds from the City Treasury to cure any deficiency which may occur in the. Redemption Fund.

Amounts in the Redemption Fund shall also be withdrawn and deposited in the Rebate Fund as provided in Section 6.2 hereof.

(c) Investment. Moneys in the Redemption Fund shall be invested and deposited in accordance with Section 6.1 hereof. Investment Earnings shall be retained in the Redemption Fund, except to the extent they are required to be deposited by the Fiscal Agent in the Rebate Fund in accordance ,with Section 6.2 hereof.

Section 4.3. Reserve Fund. (a) Establishment of Fund, Disbursement. There is hereby established, as a separate account to be held by the Fiscal Agent the "Reserve Fund" to the credit of which an initial deposit shall be made from monies on deposit under the Reserve Fund established and held under the Prior Bonds Fiscal Agent Agreement, as required by the Escrow Agreement, which deposit is equal to the Reserve Requirement as of the Closing Date, and to which deposits shall be made as provided in Sections 4.3(b) and 3.4(e)(ii). Moneys in the Reserve Fund shall be held by the Fiscal Agent for the benefit of the Owners of the Bonds as a reserve for the payment of the principal of and interest on the Bonds and shall be subject to a lien in favor of the Owners of the Bonds.

(b) Use of Fund. Except as otherwise provided in this Section, all amounts deposited in the Reserve Fund shall be used and withdrawn by the Riscal Agent solely for the purpose of making transfers to the Redemption Fund in the event of any deficiency at any time in the Redemption Fund of the amount then required for payment of the principal of, and interest on the

19 1475356

Bonds or, in accordance with the provisions of Section 4.3(e), or for the purpose of redeeming Bonds.

Amounts transferred from the Reserve Fund to the Redemption Fund pursuant to this subsection shall be restored by the City to satisfy the then applicable Reserve Requirement from (i) the collection of delinquent installments on the Reassessments levied on parcels for wh1ch such installments are delinquent, and penalties and interest thereon, whether by judicial foreclosure proceedings or otherwise, as soon as is reasonably possible following the receipt by the City of such delinquent installments, penalties and interest, and (ii) monies transferred by the Trustee under the Authority Bonds Indenture pursuant to Section 4.05 thereof. Except as provided by the foregoing sentence, the City has no monies available, and no obligation hereunder, to replenish the Reserve Fund to the Reserve Requirement.

(c) Transfer Due to Deficiency in Redemption Fund. Whenever transfer IS made from the Reserve Fund to the Redemption Fund due to a deficiency in the Redemption Fund, the Fiscal Agent shall report such fact to the City.

(d) Transfers on Payment of Reassessment. Whenever a Reassessment levied on a lot or parcel of property within the Assessment District is paid off, the Fiscal Agent shall, upon receiving an Officer's Certificate regarding such Reassessment, transfer from the Reserve Fund to the Reassessment Prepayment Account an amount equal to the reduction in such Reassessment determined pursuant to Section 8881 of the California Streets and Highways Code, which amount shall be specified in the Officer's Certificate. Upon receipt of such an Officer's Certificate, the Fiscal Agent is authorized to act thereon without further inquiry, s~all not be responsible for the accuracy of the statements contained therein, and shall be absolutely protected and incur no liability in relying on such Officer's Certificate.

(e) Transfer of Excess of Reserve Requirement. Whenever, on any September 3, the amount in the Reserve Fund, less Investment Earnings resulting from the investment of the funds therein which pursuant to Section 6.2 hereof must be rebated to the United States, exceeds the then applicable Reserve Requirement, the Fiscal Agent shall provide written notice to the City of the amount of the excess and shall, subject to the requirements of Section 6.2 hereof, transfer an amount equal to the· excess from the Reserve Fund to the Redemption Fund to be used for the payment of Debt Service on the next succeeding Interest Payment Date in accordance with Section 4.2 hereof.

(f) Transfer When Balance Exceeds Outstanding Bonds. Whenever the balance in the Reserve Fund exceeds the amount required to redeem or pay all of the then Outstanding Bonds, including interest accrued to the date of payment or redemption and premium, If any, due upon redemption, the Fiscal Agent shall, upon receiving written direction from an Authorized Officer, transfer money from the Reserve Fund to the Reassessment Prepayment Account and the Redemption Fund as provided in the next succeeding sentence to redeem all of the Outstanding

c Bonds in accordance with Sections 3.4(d) and 2.3(b) on the next succeeding Interest Payment Date. To effect such redemption, the Fiscal Agent shall make the following transfers from the Reserve Fund: (i) an amount equal to the principal and premium on the Bonds due upon redemptiOn to the Reassessment Prepayment Account, and (ii) an amount equal to the interest

20 1475356

thereon accrued to the redemption date to the Redemption Fund. In the event that the amounts so transferred from the Reserve Fund to the Reassessment Prepayment Account and the Redemption Fund exceeds the amount required to pay and redeem the Outstanding Bonds, the balance in the Reserve Fund shall be transferred by the Fiscal Agent to the City to be applied as provided in Section 8885 of the California Streets and Highways Code. Upon recetpt of such an Officer's Certificate, the Fiscal Agent is authorized to act thereon without further inquiry, shall not be responsible for the accuracy of the statements contained therein, and shall be absolufety protected and incur no liability in relying on such Officer's Certificate.

(g) Investment Moneys in the Reserve Fund shall, except a~ provided in subsection (d) above'; be invested and deposited in accordance with Section 6.1 hereof.

ARTICLEV

OTHER COVENANTS, REPRESENTATIONS AND DECLARATIONS OF THE CITY

Section 5.1. Punctual Payment. The City will punctually pay or cause to be paid the principal of and interest and any premium on the Bonds when and as due in strict conformity with the terms of this Agreement and any Supplemental Agreement to the extent that the Reassessment Revenues are available therefor, and it will faithfully observe and perform all of the conditions, covenants and requirements of this Agreement and all Supplemental Agreements and of the Bonds.

Section 5.2. Special Obligation. The Bonds are special obligations of the City and are payable solely from and secured solely by the Reassessment Revenues and the amounts in the Redemption Fund, the Reserve Fund and the Reassessment Fund.

Section 5.3. Extension of Time for Payment. In order to prevent any accumulation of claims for interest after maturity, the City shall not, directly or indirectly, extend or consent to the extension of the time for the payment of any claim' for interest on any of the Bonds and shall not, directly or indirectly, be a party to the approval of any such arrangement by purchasmg or funding said. claims for interest or in any other manner. In case any such claim for interest shall be extended or funded, whether or not with the consent of the City, such claim for interest so extended or -funded shall not be entitled, in case of default hereunder, to the benefits of this Agreement, except subject to the prior payment in full of the prindpal of all of the Bonds then Outstanding and of all claims for interest which shall not have been' so extended or funded.

Section 5.4. Against Encumbrances. The City :shall not encumber, pledge or place any charge or lien upon any of the Reassessment Revenues or othe~ amounts pledged to the Bonds superior to or on a parity with the pledge and lien herein created for the benefit of the Bonds, except as permitted by this Agreement, incluqing without limitation Section 2.12 with respect to refunding bonds ..

Section 5.5. Protection of Security and Rights of Owricrs. The City will preserve and protect the security of the Bonds and the rights of the Owners, and will warrant and defend their

21 1475356

nghts against all claims and demands of all persons From and after the delivery of any of the Bonds by the City, the Bonds shall be incontestable by the City.

Section 5.6. Collection of Reassessment Revenues. The City shall comply with all requirements of the 1915 Act so as to assure the timely collection of Reassessment Revenues, including without limitation, the enforcement of the payment or collection of delinquent Reassessments.

Section 5.7. Further Assurances. The City will adopt, make, execute and dehver any and all such further ordinances, resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Agreement, and for better assuring and confirming unto the Owners of the Bonds the rights and benefits provided in this Agreement.

Section 5.8. Tax Covenants. Notwithstanding any other provision of this Indenture, absent an opinion of Bond Counsel that the exclusion from gross income of interest on the Bonds issued on a tax-exempt basis for federal income tax purposes will not be adversely affected for federal income tax purposes, the City covenants to comply with all applicable requirements of the Code necessary to preserve such exclusion from gross income and specifically covenants, without limiting the generality of the foregoing, as follows:

(a) The City shall not take any action, or fail to take any action, if any such action or failure to take action would adversely affect the Tax-exempt status of interest on the Bonds under Section 103(a) of the Code or cause interest on the Bonds to be an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations under Section 55 of the Code; and

(b) In furtherance of the foregoing tax covenant, the City shall comply with the provisions of the Tax Certificate, which is incorporated herein as if fully set forth herein.

The covenants of the City contained in this Section 5.8 shall survive the payment, redemption or defeasance of Bonds pursuant to Section 9.3 hereof. The Fiscal Agent makes no warranties, covenants or representations regarding the current or future tax status of interest on the Bonds.

Section 5.9. Covenant to Foreclose. The City hereby covenants with and for the benefit of the Owners of the Bonds that it will order, and cause to be commenced, judicial foreclosure proceedings against properties with delinquent Reassessment installments in excess of $2,000 by the October I following the close of the Fiscal Year in which such mstallments were due, and will commence judicial foreclosure proceedings against all properties with delinquent Reassessment installments by the October I following the close of each Fiscal Year in which it receives Reassessment Revenues in an amount which is less than ninety-five percent (95%) of the total Reassessment Revenues which were to be received in the Fiscal Year and diligently pursue to completion such foreclosure proceedings; provided, however, the City may elect to defer the commencement of foreclosure proceedings with respect to any property so long

' '

22 1475356

as (i) the amount on.deposit in the Reserve Fund is equal to the Reserve Requirement and (ii) the City is current in the payment of Debt Service.

Notwithstanding the foregoing, if at any time, the County's Teeter Plan (adopted pursuant to Sections 4701 through 4717 of the California Revenue and Taxation Code) is in effect and is made applicable to the Assessment District and the Reassessments being levied in connection with the Bonds, the City may, in its discretion, elect not to commence any judicial foreclosure proceeding pursuant to this Section 5.9 or defer the commencement of such proceedings until such time as the City deems appropriate.

ARTICLE VI

INVESTMENTS; REBATE FUND; LIABILITY OF THE CITY

Section 6.1. Deposit and Investment of Moneys in Funds. Subject in all respects to the provisions of Section 6.2 hereof, moneys in any tund or account created or established by this Agreement and held by the Fiscal Agent shall be invested by the Fiscal Agent in Permitted Investments, as directed pursuant to an Officer's Certificate filed with the Fiscal Agent at least two (2) Business Days in advance of the making of such investments; provided that moneys in the Reserve Fund shall be invested in Permitted Investments which shall mature not more than five years from the date of such investment. In the absence of any such Officer's Certificate, the Fiscal Agent shall invest any such moneys in Permitted Investments described in paragraph (d) of the definition of Permitted Investments in Section 1.3 hereof. Except as specifically provided herein, the Fiscal Agent shall have no obligation to pay additional interest or maximize investment income on any funds held by it. Neither the City nor the Owners of the Bonds shall have any claim of any kind against the Fiscal Agent in connection with investments properly made pursuant to this Section 6.1. Obligations purchased as an investment of moneys in any fund or account shall be deemed to be part of such fund or account, subject, however, to the

, requirements of this Agreement for transfer of lnyestment Earnings in funds and accounts.

The Fiscal Agent shall be entitled to rely conclusively upon the written instructions of the City directing investments in Permitted Investments as to the fact that each such investment is permitted by the laws of the State, and shall not be required to make further investigation with respect thereto. With respect to any restrictions contained in the definition of Permitted Investments in Section 1.3 hereof which embody legal conclusions (e.g., the existence, validity and perfection of security interests in collateral), the Fiscal Agent shall be entitled to rely conclusively on an opinion of counsel obtained at the City's expense.

The Fiscal Agent or an affiliate of the Fiscal ;'\gent may act as principal or agent in the acquisition or disposition of any investment and may engage in or be interested in any financial or other transaction with the City. The Fiscal Agent shall not incur any liability for losses arising from any investments made pursuant to this. Section 6.1. For purposes of determining the amount on deposit in any fund or account held hereunder, all Permitted Investments or investments credited to such fund or account shall be valued at the cost thereof (excluding accrued interest and brokerage commissions, if any).

23 1475356

Subject in all respects to the provisions of Section 6.2 hereof, investments in any and all funds and accounts may be commingled in a single fund for purposes of making, holding and disposing of investments, notwithstanding provisions herein for transfer to or holding in or to the credit of particular funds or accounts of amounts received or held by the Fiscal Agent hereunder, provided that the Fiscal Agent shall at all times account for such mvestments stnctly in accordance with the funds and accounts to which they ani credited and otherwise as provided in this Agreement.

The Fiscal Agent shall sell or present for redemption, any investment security whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund or account to which such investment security is credited, and the Fiscal Agent shall not be hable or responsible for any loss resulting from the acquisition or disposition of any such investment security in accordance herewith.

The Fiscal Agent shall furnish the City periodic cash transaction statements wh!Ch include detail for all investment transactions effected by the Fiscal Agent or brokers selected by the City. Upon the City's election, such statements will be delivered via the Trustee's Online Trust and Custody service and upon electing such service, paper statements will be provided only upon request. The City waives the right to receive brokerage confirmations of security transactions effected by the Fiscal Agent as they occur, to the extent permitted by law. The City further understands that trade confirmations for securities transactions effected by the Fiscal Agent will be available upon request and at no additional cost and other trade confirmatiOns may be obtained from the applicable broker.

The Fiscal Agent or any of its affiliates may act as sponsor, advisor or manager in connection with any investments made by the Fiscal Agent hereunder.

SectiOn 6.2. Rebate Fund; Rebate to United States. There is hereby created, to be held by the Fiscal Agent, as a separate account distinct from all other funds and accounts held by the Fiscal Agent under this Agreement, the Rebate Fund. Pursuant to the written direction of the City, the Fiscal Agent shall deposit into the Rebate Ftlnd moneys transferred by the City to the Fiscal Agent pursuant to the Tax Certificate. The Rebate Fund shall be held either uninvested or invested only in Federal Securities at the direction of the City. Moneys on deposit in the Rebate Fund shall be applied only to payments made to the Umted States, to the extent such payments are required/by the Tax Certificate. The Fiscal Agent shall, upon written direction of the City, make such payments to the United States.

The Fiscal Agent's sole responsibilities under this Section 6.2 are to follow the written instructions of the City pertaining hereto and the Fiscal Agent shall have no independent responsibility to monitor or enforce compliance by the City with the Tax Certificate. The City shall be responsible for any fees and expenses incurred by the Fiscal Agent pursuant to this Section 6.2.

I

The Fiscal Agent shall, upon written request and directwn from the City, transfer to or upon the order of the City any moneys on deposit in the Rebate Fund in excess of the amount, if any, required to be maintained or held therein in accordance with the Tax Certificate. Upon . .

24 1475356

receipt of such a written request and direction the Fiscal Agent is authorized to act thereon without further inquiry, shall not be responsible for the accuracy thereof, and shall be absolutely protected and incur no liability in relying thereon.

Section 6.3. Liability of City. The City·shall not incur any responsibility in respect of the Bonds or this Agreement other than in connection ~ith the duties or obligations explicitly herein or in the Bonds assigned to or imposed upon it. The City shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful 'default.

In the absence of bad faith, the City may conclusively rely. as to the truth of the statements and the 90rrectness of the opinions expressed therein, upon certificates or opinions furnished to the City and conforming to the requirements of this Agreement. The City shall not be liable for any error of judgment made in good faith unless it shall be proved that it was negligent in ascertaining the pertinent facts. · ·

No provision of thts Agreement shall requtre the City to expend or risk tts own general funds or otherwise incur any financial liability (other than with respect to the Reassessment Revenues) in the performance of any of its obligations hereunder, or in the exercise of and of its rights or po.,.ers, if it shall have reasonable grounds for believing that repayment of such funds or adequate inderrmity against such risk or liability is not reasonably assured to it.

The City may rely and shall be protected in acting or refraining from acting upon any notice, resolution, request, consent, order, certificate, report, warrant, bond or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or proper parties. ·The City may consult with counsel, who may be counsel to the City, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in acc.ordance therewith.

Section 6.4. Employment of Agents by the City. In order to perform its dutie~ and obligations hereunder, the City may employ such persons or entitles as it deems necessary or advisable. The City shall not be liable for any of the acts or omissions of such persons or entities employed by it in good faith hereunder, anc! shall be entitled to rely, and shall be fully protected in doing so, upon the opinions, calculations, determinations and directions of such persons or enttties. '

ARTICLE VII THE FISCAL AGENT

Section 7.1. Appointment of Fiscal Agent. Union Bank, N.A. is hereby appointed Fiscal Agent, registrar and paying agent for the Bonds. The Fiscal Agent undertakes to' perform. such duties, and only such duties, as are specifically set forth in this Agreement, and no implied covenants or obligations shall be read into this Agreement against the Fiscal Agent.

Any financial instttution into which the Fiscal Agent may be merged or converted or with which it may be consolidated or any financial institution resulting from any merger, conversion or consolidation to which it shall be a party or any financial institution to which the Fiscal Agent

25 1475356

may sell or transfer all or substantially all of its corporate trust business, provided such financial institution shall be eligible under the following paragraph of this Section 7.1, shall be the successor to the Fiscal Agent without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding.

The City may remove the Fiscal Agent initially appointed, and any successor thereto, and the City may appoint a successor or successors thereto, but any such successor shall be a financial institution having (ot in the case of a corporation or trust compan~ included in a bank holding company system, the related bank holding company shall have) a combined capital (exclusive of borrowed capital) and surplus of at least $75,000,000, and subject to supervision or examination by federal or state authority. If such financial institution publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purposes of this Section 7.1, combined capital

, and surplus of such financial institution shall be deemed to be its combined capital and surplus as ' set forth in its most recent report of condition so published.

The Fiscal Agent may at any time resign by giving thirty (30) days' written notice to the City and by giving to the Owners notice by mail of such resignation. Upon receiving notice of such resignation, the City shall promptly appoint a successor Fiscal Agent by an instrument in writing. Any resignation or removal of the Fiscal Agent shall become effective upon acceptance of appointment by the successor Fiscal Agent.

If no appointment of a successor Fiscal Agent shall be made pursuant to the foregoing provisions of this Section 7.1 within sixty (60) days after the Fiscal Agent shall have given to the City written notice or after a vacancy in the office of the Fiscal Agent shall have occurred by reason of its inability to act, the Fiscal Agent, at the expense of the City, or any Owner may apply to any court of competent jurisdiction to appoint a successor Fiscal Agent. Said court may thereupon, after such notice, if any, as such court may deem proper, appoint a successor Fiscal Agent.

Section 7 2 Liability of Fiscal Agent. The recitals of facts, covenants and agreements herein and in the Bonds contained shall be taken as statements, covenants and agreements of the City and the Fiscal Agent assumes no responsibility for the correctness of the same, nor makes any representations as to the validity or sufficiency of this Agreement or of the Bonds, nor shall the Fiscal Agent incur any responsibility in respect thereof, other than in connection with the duties or obligations herein or in the Bonds expressly assigned to or imposed upon it. The Fiscal Agent shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful misconduct. The Fiscal Agent assumes no responsibility or liability for any information, statement or recital in any offering memorandum or other disclosure material prepared or distributed with respect to the issuance of the Bonds.

In the absence of willful misconduct, the Fiscal Agent may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates, written directions or opinions furnished to the Fiscal Agent and conforming to the reqllirements of this Agreement. Except as provided above in this paragraph, the Fiscal Agent shall be protected and shall incur no liability in acting or proceeding, or in not acting or not proceeding,

26 1475356

in accordance with the tenns of this Agreement, upon any resolution, order, notice, request, consent or waiver, certificate, statement, affidavit, facsimile transmission, electronic mail or other paper or document which it shall reasonably believe to be genuine and to have been adopted or signed by the proper person or to have been prepared and furnished pursuant to any provision of this Agreement, and the Fiscal Agent shalf not be under any duty to make any investigation or inquiry as to any statements contained or matters referred to in any such instrument.

The Fiscai Agent shall not be liable for any error of judgment made by a responsible officer of the Fiscal Agent unless it shall be proved that the Fiscal Agent was negligent in ascertaining the pertinent facts.

No provision of this Agreement shall require the Fiscal Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers unless an indemnity and security satisfactory to the Fiscal Agent shall have been provided to the Fiscal Agent.

The Fiscal Agent shall not be responsible for accounting for, or paying to, any party to this Agreement, including, but not limited to the City and the Owners, any returns on or benefit from funds held for payment of unredeemed Bonds or outstanding checks and no calculation of the same shall affect, or result in any offset against, fees due to the Fiscal Agent under this Agreement.

The Fiscal Agent shall have no responsibility with respect to the payment of Debt Service by the City or with respect to the observance or performance by the City of the other conditions, covenants and terms contained herein, or with respect to the investment of any moneys in any fund or account established, held or maintained by the City pursuant to this Fiscal Agent Agreement or otherwise.

All indemnification and releases from liability granted herein to the Fiscal Agent shall· extend to the directors, officers and employees of the Fiscal Agent. The Fiscal Agent may execute any of its trusts or powers or perfomi its duties through attorneys, agents or receivers.

The Fiscal Agent shall not be considered in breach of or in default in its obligatiOns hereunder or progress in respect thereto in the event of enforced delay ("unavoidable delay") in the performance of such obligations due to unforeseeable causes beyond its control and without its fault or negligence, including, but not limited to, Acts of God or of the public enemy or terrorists, acts of a government, acts of the other party, fires, floods, epidemics, qu;rrantine restrictions, strikes, freight embargoes, earthquakes, explosion, mob violence, riot, inability to procure or general sabotage or ratwning of labor. equipment, facilities, sources or energy. material or supplies in the open market, litigation or arbitration involving a party or others relating to zoning or other governmental action or inaction pertaining to the project, malicious mischief, condemnation, and unusually severe weather or delays of suppliers or subcontractors due to such causes or any similar event and/or occurrences beyond the control of the Fiscal Agent; provided that, in the event of any such unavoidable delay under this paragraph, the Fiscal Agent notify the City in writing within five (5) business days after (i) the occurrence of the event

27 I475356

giving rise to the unavoidable delay, (ii) the Fiscal Agent's actual knowledge of the impending unavoidable delay, or (iii) the Fiscal Agent's knowledge of sufficient facts under whtch a reasonable person would conclude the unavoidable delay will occur.

Section 7.3. Information. The Fiscal Agent shall provide to the City such information relating to the Bonds and the funds and accounts maintained by the Fiscal Agent hereunder as the City shall reasonably request, including, but not limited to, quarterly statements rep6rting funds held and transactions by the Fiscal Agent

Section 7.4. Reliance by Fiscal Agent. The Fiscal Agent may rely and· shall be protected in acting or refraining from acting upon any notice, resolution, request, consent, order, certificate, written direction, report, warrant, Bond. facsimile transmission, electronic ~ail or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or proper parties. The Fiscal Agent may consult with counsel, who may be counsel to the City, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or s.uffered by the Fiscal Agent hereunder in accordance therewith.

Whenever in the administration of its duties under this Agreement the Fiscal Agent shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of willful misconduct on the part of the Fiscal Agent, be deemed to be conclusively proved and established by a certificate of the City, and such certificate shall be full warranty to the Fiscal Agent for any action taken or suffered under the provisions of this Agreement or any Supplemental Agreement upon the faith thereof, but in its discretion the Fiscal Agent may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may seem reasonable.

Section 7 .5. Compensation; Indemnification. The City shall pay to the Fiscal Agent from time to time reasonable compensation for all services rendered as Fiscal Agent under this Agreement, and also all reasonable expenses, charges, fees and other disbursements, including those of its attorneys (including the allocated costs and disbursements of in-house counsel), agents and employees, incurred in and about the performance of its powers and duties under this Agreement, and the Fiscal Agent shall have a lien therefor on any funds at any time held by it under this Agreement. The City further agrees, to the extent permitted by applicable law, to indemnify and save the Fiscal Agent, its officers, employees, directors and agents, harmless against any costs, claims, expenses or liabilities, including, Without limitation fees and expenses of Its attorneys, which it may incur in the exercijle and performance of its powers and duties hereunder which are not due to its negligence or willful misconduct. The obligation of the City under this Section 7.5 shall survive resignation or removal of the Fiscal Agent under this Agreement and payment of the Bonds and discharge of this Agreement.

Section 7.6. Books and Accounts. The Fiscal Agent shall keep, or cause to be kept, proper books of record and accounts,,separate from all other records and accounts of the Fiscal Agent, in which complete and correct entries shaH be made of all transactions made by it with respect to the expenditure of amounts disbursed from the Redemption Fund, the Reassessment

28 1475356

Fund and the Reserve Fund. Such books of record and accounts shall, upon reasonable notice, at all times during business hours be subject to the inspection of the City and the Owners of not less than ten percent (10%) of the aggregate principal amount of the Bonds then Out~tanding, or their representatives duly authorized in writing.

ARTICLE VIII

MODIFICATION OR AMENDMENT OF THIS AGREEMENT

Section 8.1. Amendments Permitted. (a) Subject to Section 8.9 below, this Agreement and the rights and obligations of the City and of the Owners. of the Bonds may be modified or amended at any time by a S.upplemental Agreement pursuant to the affirmative vote at a meeting of the Owners, or with the written consent, without a meeting, of the Owners of at least sixt)' percent (60%) in aggregate principal amount of the Bonds then Outstanding, exclusive of Bonds disqualified as provided in Section l/.4 hereof. No such modification or amendment shall (i) extend the maturity of any Bond or the time for paying interest thereon,' or otherwise alter or impair the obligation of the City to pay the principal of, and the interest and any premium on, any Bond, without the express consent of the Owner of such Bond, or (ii) permit the creation of any , pledge of or lien upon the Reassessment Revenues, or the moneys on deposit in the Redemption Fund, superior to or on a parity with the pledge and lien created for the benefit of the Bonds (except as otherwise permitted by the 1915 Act or the 1984 Refunding Act, the laws of the State or this Agreement), (iii) reduce the percentage of Bonds required for the amendment hereof, (iv) reduce the principal amount of or redemption premium on any Bond or reduce the interest rate thereon, or (v) modify the rights or obligations of the Fiscal Agent without 'its prior consent.

(b) · Subject to Section 8.9 below, this Agreement and the rights and obligations of the City and the O'.'.'llers may also be modified or amended at any iime by a Supplemental Agreement, without the consent of any Owners, only to the extent permitted by law and only for any one or more of the following purposes: .

(i) to add to the covenants and agreements of the City in this Agreement contained, other covenants and agreements thereafter to be observed, or to limit or surrender any right or power herein reserved to or conferred upon the City;

(ii) to make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provisions of this Agreement, or in regard to questions arising under this Agreement, as the City and the Fiscal Agent may deem necessary or desirable and not inconsistent with this Agreo:;ment, and which shall not be materially adverse to the interests of the Owners of the Bonds; or

(iii) to make such additions; deletions or modifications as may be necessary or desirable to assure compliance with Section 148 of the Code relating to required rebate of moneys to the United States or otherwise as may be necessary to assure exclusion from gross income for federal income tax purposes of interest 'on the Bonds or to conform with the Code.

29 1475356

(iv) to modify, amend or supplement this Agreement in such manner as to permit the qualification hereof under the Trust Indenture Act of 1939, as amended, or any similar federal statute hereafter in effect; and·

(v) to make other modifications not adversely affectmg any Outstanding Bonds in any material respect.

Section 8.2. Owners' Meetings. The City may at any time call a meeting of the Owners. In such event the City is authorized to fix the time and place of any such meeting and to provide for the giving of notice thereof and to fix and adopt rules and regulations for the conduct of the meeting. ·

Section 8.3. Procedure for Amendment with Written Consent of Owners. To the extent that such amendment is permitted by Sectwn 8.l(a) and SectiOn 8.9 hereof, the City may at any time enter into a Supplemental Agreement amending the provisions of the Bonds or of this Agreement or any Supplemental Agreement, to take effect when and as provided in this Section 8.3. A copy of the Supplemental Agreement, together with a request to Owners for their consent thereto, shall be mailed by first class mail, postage prepaid, by the City to each Owner of Bonds and Authority Bonds then Outstanding, but failure to mail copies of the Supplemental Agreement and request shall not affect the validity of the Supplemental Agreement when assented to as in this Section provided.

Such a Supplemental Agreement shall not become effective unless there shall be filed with the City the written consents of the Owners of at least sixty percent ( 60%) in aggregate principal amount of the Bonds then Outstandmg (exclusive of Bonds disqualified as provided in Section 8.4 hereof) and a notice shall have been mailed as hereinafter in this Section provided. Each such consent shall be effective only if accompanied by proof of ownership of the Bonds for which such consent is given, which proof shall be such as is permitted by ·section 9.4 hereof. · Any such consent shall be binding upon the Owner of the Bonds giving such consent and on any subsequent Owner (whether or not such subsequent Owner has notice thereof) unless such consent is revoked in writing by the Owner giving such consent or a subsequent Owner by filing such revocation with the City prior to the date when the notice hereinafter in this Section provided for has been mailed.

After the Owners of the required percentage of Bonds shall have filed their consents to the Supplemental Agreement, the City shall mail a notice to the Owners in the manner hereinbefore provided m this Section for the mailing of the Supplemental Agreement, statmg in substance that the Supplemental Agreement has been consented to by the Owners of the required percentage of Bonds and will be effective as provided in this Section (but failure to mail copies of said notice shall not affect the validity of the Supplemental Agreement or consents thereto). Proof of the mailing of such notice shall be filed with the City. A record, consisting of the papers required by this SectJOn 8.3 to be filed with the City, shall be proof of the matters !herein stated until the contrary is proved. The Supplemental Agreement shall become effective upon the filing with the City of the proof of mailing of such notice, and the Supplemental Agreement shall be deemed conclusively binding (except as otherwise hereinabove specifically provided in this Article) upon the City and the Owners of all Bonds then Outstanding at the expiration of

30 1475356

sixty (60) days after such filmg, except in the event of a final decree of a court of competent jurisdiction setting aside such consent in a legal action or ·equitable proceeding for such purpose · commenced within such sixty (60) day period.

Section 8.4. Disqualified Bonds. Bonds owned or held for the account of the City, excepting any pension or retirement fund, shall not be deemed Outstanding for the purpose of any vote, consent or other action or any calculatiOn of Outstanding Bonds provided for in this Article Vlll, and shall not be entitled to vote upon, consent to, or participate in any action provided for m this Article VIII.

Section 8.5. Effect of Supplemental Agreement. From and after the time any Supplemental Agreement becomes effective pursuant to this Article VIII, this Agreement shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under this Agreement of the City and all Owners of Bonds Outstanding shall thereafter be determined, exercised ·and_ enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such Supplemental Agreement shall be deemed to be part of the terms and conditions of this Agreement for any and all purposes.

Section 8.6. Endorsement of Replacement of Bonds Issued after Amendments. The City may determine that Bonds issued and delivered after the effective date of any action taken as provided in this Article VIII shall bear a notation, by endorsement or otherwise, in form approved by the City, as to such action. In that case, upon demand of the Owner of any Bond Outstanding at such effective date and upon presentation of his or her Bond for that purpose at the Principal Office of the Fiscal Agent or at such other office as the Fiscal Agent may select and designate for that purpose, a suitable notation shall be made on such Bond. ·The City may determine that new Bonds, so modified as in the opinion of the City is necessary to conform to such actiOn, shall be prepared, executed and delivered. In that case, upon demand of the Owner of any Bonds then Outstanding, such new Bonds shall be exchanged at the Principal Office of the Fiscal Agent without cost to any Owner, for like Bonds then Outstanding, upon surrender of such Bonds.

Section 8 7. Amendatory Endorsement of Bonds The provisions of this Article shall not prevent any Owner from acceptmg any amendment as to the particular Bonds held by the Owner, provided that due notation thereof is made on such Bonds.

Section 8.8. Consent of Fiscal Agent. The Fiscal Agent shall not be required to enter into or consent to any Supplemental Agreement which, in the sole judgment of the Fiscal Agent, might adversely affect the rights, obligations, powers, privileges, indemnities, and immunities provided to the Fiscal Agent herein. The ·Fiscal Agent upon request, shall be provided an opinion of counsel that any such Supplemental Agreement complies with the provisions of this Article VIII and the Fiscal Agent may conclusively rely upon such opinion.

Section 8.9. Requirements for Authority-owned Bonds. So long as any Bonds are owned by the Authority, no amendment to this Agreement shall be effective unless it is permitted under Section 5.08 of the Authority Bonds Indenture.

31 1475356

ARTICLE IX

MISCELLANEOUS

Section 9.1. Benefits of Agreement Limited to Parties. Nothing in this Agreement, expressed or implied, is intended to give to any person other than the City, the Fiscal Agent, and the Owners (including the Trustee as assignee of the Authority under the Authority Bonds Indenture, to the extent that the Authority is an Owner of any Bonds hereunder), any right, remedy or claim under or by reason of this Agreement. Any covenants, stipulations, promises or agreements in this Agreement contained by and on behalf of the City shall be for the sole and exclusive benefit of the Owners (including the Trustee as assignee of the Authority under the Authority Bonds Indenture, to the extent that the Authority is an Owner of any Bonds hereunder) and the Fiscal Agent. It is hereby acknowledged that the Authority, as initial Owner of the Bonds, has assigned to the Trustee, for the benefit of the owners from time to time of the Authority Bonds, all of the right, title and interest of the Authority in the Bonds and hereunder as an Owner of the Bonds.

Section 9.2. Successors Deemed Included in All Refererices to Predecessor. Whenever in this Agreement or any Supplemental Agreement either the City or the Fiscal Agent is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in this Agreement contained by or on behalf of the Cjty or the Fiscal Agent shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not.

Section 9.3. Discharge of Agreement. If the City shall pay and discharge the entire indebtedness on all Bonds in any one or more of the following ways:

(A) by well and truly paying or causing to be paid the principal of and interest and any premium on all Bonds, as and when the same become due and payable;

(B) by depositing with the Fiscal Agent, in trust, at or before maturity, an amount of money which, together with the amounts then on deposit in the Redemption Fund, the Reassessment Fund and the Reserve Fund, is fully sufficient to pay all Bonds, including all principal, interest and redemption premiums, if any; or

(C) by irrevocably depositing with the Fiscal Agent or another fiduciary, in trust, cash or noncallable Federal Securities in such amount as the City shall determine. as confirmed by an Independent Financial Consultant, will, together With the interest to accrue thereon and amounts then on deposit in the Redemption Fund, the Reassessment Fund and the Reserve Fund, be fully sufficient to pay and discharge the indebtedness on all Bonds (including all principal, interest and redemption premiums) at or before their respective maturity dates; and if such Bonds are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as in this Agreement provided or provision satisfactory to the Fiscal Agent shall have been made for the giving of such notice, then, at the election of the City, and notwithstanding that any Bonds shall not have been surrendered for payment, the pledge of the Reassessment Revenues and other funds provided for. in this Agreement and all other obligations of the City under this Agreement

32 1475356

with respect to all Bonds shall cease and terminate, except the obligation of the City to pay or cause to be paid to the Owners of the Bonds not so surrendered and paid all sums due thereon, the obligation of the City to pay all amounts owing to the Fiscal Agent pursuant to Section 7.5 hereof, and the obligations of the City pursuant to the covenants contained in Section 5.8 hereof, and thereafter Reassessment Revenues shall not be payable to the Fiscal Agent. Notice of such election shall be filed with the Fiscal Agent. The satisfaction and discharge of this Agreement shall be without prejudice to the rights of the Fiscal Agent to charge and be reimbursed by the City for the expenses which it shall thereafter incur in connection herewith.

Any ftmds held by the Fiscal Agent to pay and discharge the indebtedness on all Bonds, upon payment of all fees and expenses of the Fiscal Agent, which are not required for such purpose, shall be paid over to the City.

Section 9.4. Execution of Documents and Proof of Ownership by Owners. Any request, declaration or other instrument which this Agreement may require or permit to be executed by Owners may be in one or more instruments of similar tenor, and shall be executed by Owners in person or by their attorneys appointed in writing.

Except as otherwise herein expressly provided, the fact and date of the execution by any Owner or his or her attorney of such a request, declaration or other instrument, or of a writing appointing such an attorney, may be proved by the certificate of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state in which he or she purports to act, that the person signing such request, declaration or other instrument or writing acknowledged to him or her the execution thereof, or by an affidavit of a witness of such execution, duly sworn to before such a notary. public or other officer.

Except as otherwise herein expressly provided, the ownership of registered Bonds and the amount, maturity, number and date of holding the same shall be proved by the Registration Books.

Any request, declaration, cqnsent or other instrument or writing of the Owner of any Bond shall bind all future Owners of such Bond in respect of anything done or suffered to be done by the City or the Fiscal Agent in accordance therewith.

Section 9.5. Waiver of Personal Liability. No member, officer, agent or employee of the City shall be individually or pevsonally liable for the payment of the principal of, or interest or any premium on, the Bonds- but nothing herein contained shall relieve any such member, officer, agent or employee from the performance of any official duty provided by law.

Section 9.6. Notices. Any notice, request, complaint, demand or other communication under this Agreement shall be given by first class mail or personal delivery to the party entitled thereto at its address set forth below, or by telecopy or other form of telecommunication, confirmed by telephone at its number set forth below. Notice shall be effective either (a) upon transmission by telecopy or other form of telecommunication, (b) 48 hours after deposit m the United S'tates mail, postage prepaid, or (c) in the case of personal delivery to any person, upon actual receipt.

33 1475356

If to the City:

If to the Authority:

If to the Fiscal Agent: '

City of Indio I 00 Civic Center Mall Indio, California 92201 Attention: Finance Director Telecopier: (760) 391-4029 Telephone: (760) 39 I -4000

Indio Finance Authority 100 Civic Center Mall Indio, California 92201 Attention: Treasurer Telecopier: (760) 391-4029 Telephone: (760) 391-4000

Union Bank, N.A. 120 South San Pedro Street, Suite 400 Los Angeles, California 90012 Attention: Corporation Trust Department Telecopier: (213) 972-5694 Telephone: (213) 972-5674

The above parties may designate any further or different addresses to which subsequent notices, certificates or other communications shall be sent.

The Fiscal Agent agrees to accept and act upon facsimile transmtsswn of written instructions and/or directions pursuant to this Agreement; provided, however, that: (a) subsequent to such facsimile transmission of written instructions, there shall be provided to the fiscal Agent originally executed instructions and/or directions in a timely manner, (b) such originally executed instructions and/or directions by the City shall be signed by an Authorized Officer, and (c) the City shall provide to the Fiscal Agent an incumbency certificate listing such designated persons and the City shall from time to time provide the Fiscal Agent updated incumbency certificates, as necessary or appropriate, reflecting persons who have been added or deleted from the listing.

Section 9.7. Severability. If any section, paragraph, sentence, clause or phrase of this Agreement shall for any reason be held by a court of competent jurisdictiOn to be illegal or unenforceable, such holding shall not affect the validity of the remaining portions of this Agreement. The City hereby declares that it would have executed and delivered this Agreement and each and every other section, paragraph, sentence, clause or phrase hereof and authorized the issue of the Bonds pursuant thereto irrespective of the fact that any one or more sections, paragraphs, sentences, clauses or phrases of this Agreement may be held illegal, invalid or unenforceable.

Section 9.8. Unclaimed Moneys. Anything contamed herein to the contrary notwithstanding, any moneys held by the Fiscal Agent in trust for the payment and discharge of the principal of, and the interest and any premium on, the Bonds which remains unclaimed for

34 1475356

two (2) years after the date when the payment of such principal, interest and premium have become payable, if such moneys were held by the Fiscal Agent at such date, shall be repaid by the Fiscal Agent to the City as its absolute property free from any trust, and the Fiscal Agent shall have no responsibility or liability for such moneys.

Section 9.9. · Applicable Law. This Agreement shall be governed by and enforced in accordance with the laws of the State applicable to contracts made and performed m the State of California.

Section 9.10. Conflict with 1915 Act or 1984 Refunding Act. In the event of a conflict between any provision of this Agreement with any provision of the 1915 Act or the 1984 Refunding Act as in effect on the Closing Date, the provision of the 1915 Act or the 1984 Refunding Act, as applicable, shall prevail over the conflicting provision of this Agreement.

Section 9.11. Conclusive Evidence of Regularity. Bonds issued pursuant to this Agreement shall constitute conclusive evidence of the regularity of all proceedings under the 19~4 Refunding Act relative to their issuance.·

Section 9 .12. Payment on Business Day. In any case where the date of the payment of interest or of principal (and premium, if any) of the Bonds or the date 'fixed for redemption is other than a Business Day, the payment of interest or principal (and premium, if any) need not be made on such date but may be made on the next succeeding day which is a Business Day with the same force and ~ffect as if made on the date required, and no interest shall accrue for the period from and after such date.

Section 9.13. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original.

[The remainder of this page is intentionally left blank ]

35 1475356

IN WITNESS WHEREOF, the City has caused this Agreement to be executed in its name and attested, and the Fiscal Agent. in acknowledgment of its acceptance of the duties created hereunder, has caused this Agreement to be executed in its name, all as the date first written above.

CITY OF INDIO

By:_~~7~~~~--.t-.._ tJor

ATTEST:

UNION BANK, N.A., as Fiscal gent

JlXt~.t J b.U{cu·(?J/ By: A thorized Officer .

36 1475356

IN WITNESS WHEREOF, the City has caused this Agreement to be executed in its name and attested, and the Fiscal Agent, in acknowledgment of its acceptance of the duties created hereunder, has caused this Agreement to be executed in its name, all as the date first written above.

ATTEST:

By:---------­Clty Clerk

1475356

CITY OF INDIO

By:----------­Mayor

UNION BANK, N.A., as Fiscal Agent

By:-----------Authorized Officer

36

REGISTERED NO. R-l

' EXHIBIT A

FORM OF BOND

UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF RIVERSIDE

CITY OF INDIO ASSESSMENT DISTRICT NO. 2002-1

$3,410,000 00

LIMITED OBLIGATION REFUNDING IMPROVEMENT BOND SERIES 2012

INTEREST RATE 4.69%

REGISTERED OWNER:

PRINCIPAL AMOUNT:

MATURITY DATE September 2, 2027

BOND DATE July 26, 2012

UNION BANK, N.A., AS TRUSTEE FOR THE INDIO FINANCE AUTHORITY

THREE Mit.LION FOUR HUNDRED TEN THOUSAND DOLLARS

Under and by .virtue of the Refunding Act of 1984 for 1915 Improvement Act Bonds, Division 11.5 of the California Street and Highways Code (the "1984 Refunding Acf') the City of !ndio, County of Riverside, California (the "City"), will, out of the Redemption Fund for the payment of the Bonds issued upon the unpaid reassessments made for the refunding and · reassessment ·more fuliy described in proceedings taken pursuant to Resolution No. 9535, adopted by the City Council of the City on May 16, 2012 (the "Resolution of Intention"), pay to the registered owner hereof, or registered assigns, on the maturity date stated above, the principal sum shown hereon in lawful money of the United States of America and in like manner will pay mterest at the rate per annum stated above, payable semiannually on March 2 and September 2 (each an "Interest Payment Date") in each year commencing on September 2, 2012. This Bond bears interest from the Interest Payment Date next preceding its date of authentication and registration, unless this Bond is authenticated and registered (i) on an Interest Payment Date, in which event interest shall be payable from such date of authentication and registration,o(ii) prior to an Interest Payment Date and after the close of business on the fifteenth (151h) day of the month immediately preceding such Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or• (iii) prior to the close of business on the 15th day of the month immediately preceding the first Interest Payment Date, in which event it shall bear interest from the Bond Date stated above, until payment of such principal sum shall have been discharged; provided, however, that if at the time of authentication of such Bond, interest is in default, interest on that Bond shall be payable from the last Interest Payment Date to which the

A-1 1475356

. '

. '

interest has been paid or made available for payment. Both the principal hereof and redemption premium hereon are payable upon presentation and surrender hereof at the corporate trust office of Union Bank, N.A., or its successor, as Fiscal Agent (the "Fiscal Agent"), in Los Angeles, California, or such other place as may be designated by the Fiscal Agent and the interest hereon is payable by check mailed, by first-class mail, to the owner hereof at such owner's address as it appears on the registration books of the Fiscal Agent of the fifteenth (15th) day of the month immediately preceding each Interest Payment Date, or by wire transfer made on the Interest Payment Date upon instructions of any owner of $500,000 or more in aggregate principal amount of Bonds delivered to the Fiscal Agent prior to the fifteenth (15th) day of the month immediately preceding the Interest Payment Date.

This Bond will continue to bear interest after maturity at the rate above stated, provided that it is presented at maturity and payment thereof is refused upon the sole ground that there are not sufficient moneys in the Redemption Fund with which to pay same. If it is not presented at maturity interest hereon will run only until maturity.

This Bond is one of several annual series of bonds of like date, tenor and effect, but differing in amounts, maturities and interest rates, issued by the City of Indio under the 1984 Refunding Act, Resolution No. 9539 of the City Council of the City, adopted on May 16, 2012 (the "Resolution of Issuance") and a Fiscal Agent Agreement dated as of July 1, 2012 (the "Fiscal Agent Agreement") by and between the City and the Fiscal Agent in the aggregate principal amount of $3,410,000 for the purpose of providing means for the refunding and reassessment described in the proceedings, and is secured by the moneys in the Redemption Fund and by the unpaid reassessments made for the payment of the refunding and reassessment, and, including principal and interest, is payable exclusively out of the Redemption Fund and certain other funds and accounts as provided in the Fiscal Agent Agreement. The City will not obligate itself to advance available funds from the City Treasury to cure any deficiency which may occur in the Redemption Fund.

This Bond is subject to mandatory sinking fund redemption by lot, at a redemption price equal to the principal amount thereof to be redeemed, without premium, on September 2 of each year (commencing September 2, 20 12) in the aggregate respective principal amounts set forth in the Fiscal Agent Agreement, by giving at least 30 day's notice by registered or certified mail, postage prepaid, or by personal service to the registered owners' address as they appear on the registration books of the Fiscal Agent.

This Bond or any portion of it in the amount of one dollar ($1 ), or any integral multiple thereof, may be redeemed and paid in advance of maturity upon March 2 or September 2 in any ~ear by giving at least 30 days' notice by registered or certified mail, postage prepaid, or by personal service to the registered owner hereof at the registered owner's address as it appears on the registration books of the Fiscal Agent at the following redemption prices expressed as percentages of the principal amount of the Bonds to be redeemed together with interest accrued to the date of redemption:

A-2 1475356

Redemption Dates

Prior to September 2, 2017 September 2, 2017 and thereafter

Redemption Prices

103% 100

This Bond is subject to refunding pursuant to the procedure of Division II (commencing with Section 9000) or ·Division 11.5 (commencing with· Section 9500) 'of the Streets and Highways Code of the State of California prior to maturity.

This Bond is transferable by the registered owner hereof, in person or by the owner's attorney duly authorized in writmg, at the office of the Fiscal Agent, subject to the terms and conditions provided in the Fiscal Agent Agreement including the payment of certain charges, if any, upon surrender and cancellation of this Bond. Upon transfer, a new registered Bond or Bonds, of any authorized denomination or denominations, of the same maturity, and for the same aggregate principal amount, will be issued to the transferee in exchange therefor.

Bonds not owned by 'and registered in the name of the Indio Finance Authority shall be registered only in the name of an individual (including joint owners), a corporation, a partnership or a trust.

' Neither the City nor the Fiscal Agent shall be required to exchange or to register the transfer of Bonds during the fifteen days immediately preceding any interest payment date or of any Bonds selected for redemption in advance of maturity.

The City and the Fiscal Agent may treat the owner hereof as the absolute o"'ner for all purposes, and the City and the Fiscal Agent shall not be affected by any notice to the contrary.

This Bond shall not be entitled to any benefit under the 1984 Refunding Act, the Resolution of Issuance or the Fiscal Agent Agreement, or become valid or obligatory for any purpose, until the certificate of authentication and registration hereon endorsed shall have been dated and manually signed by the Fiscal Agent.

IN WITNESS WHEREOF, the City of Indio has caused the Bond to be signed and attested by the facsimile signatures of the City Treasurer and the City Clerk, all on the Bond Date above.

CITY OF INDIO

Attest:

By ________ ~--------------/ Treasurer

City Clerk

A-3 1475356

••

• . '

CERTIFICATE OF AUTHENTICATION AND REGISTRATION

This is one of the Bonds described in the within mentioned Fiscal Agent Agreement which has been authenticated and registered on July 26, 2012.

UNION BANK, N.A., as Fiscal Agent

By: ___________ _ Authorized Signatory

==;================================================================== ASSIGNMENT

For value received, the undersigned do(es) hereby sell, assign and transfer unto

the within-mentioned Bond and hereby irrevocably constitute(s) and appoint(s)

-----~~--------~~~~--~----~~--~--~~~~------~~attorney, to transfer the same on the books kept for registration hereof with full power of substitution in the premises.

Dated: ______ ,20_

1475356 A-4

NOTICE: The signature to this assignment must correspond with the name as it appears upon the within Bond in every particular, without alteration or enlargement or any change whatsoever.

CERTIFICATE AS TO SPECIMEN BONDS

with reference to

$3,410,000 City oflndio

Assessment District No. 2002-1 Limited Obligation Refunding Improvement Bonds

Series 2012

July 26, 2012

The City of Indio, California (the "City"), acting through its Finance Director, hereby states and certifies as follows:

(e) Attached hereto as Exhibit A is a specimen of the City's Assessment District No. 2002-1, Limited Obligation Refunding Improvement Bonds, Series 2012 (the "Bonds"), in registered form, which specimen is identical in all respects, except as to numbers and signatures, delivered on this day to Union Bank, N.A., as fiscal agent (the "Fiscal Agent"), on the order of the Indio Finance Authority (the "Authority") pursuant to the Bond Purchase Agreement, dated July 19, 2012, by and between the City and the Authority.

(f) Said specimen is substantially in the form prescribed by the Fiscal Agent Agreement, dated as of July I, 2012, by and between the City and the Fiscal Agent, relating to the Bonds.

IN WITNESS WHEREOF, the undersigned has caused this Certificate to be executed by its authorized representative on the date first written above.

12183.0019\1475593

CITY OF INDIO

By:~Jd Rob Rockwell Finance Director

i

CERTIFICATE AS TO SPECIMEN BONDS

with reference to

$3,410,000 City oflndio

Assessment District No. 2002-1 Limited Obligation Refunding Improvement Bonds

Series 2012

July 26,2012

The City of Indio, California (the "City"), acting through its Finance Director, hereby states and certifies as follows:

(e) Attached hereto as Exhibit A is a specimen of the City's Assessment District No. 2002-1, Limited Obligation Refunding Improvement Bonds, Series 2012 (the "Bonds"), in registered form, which specimen is identical in all respects, except as to numbers and signatures, delivered on this day to Union Bank, N.A., as fiscal agent (the "Fiscal Agent"), on the order of the Indio Finance Authority (the "Authority") pursuant to the Bond Purchase Agreement, dated July 19,2012, by and between the City and the Authority.

(f) Said specimen is substantially in the form prescribed by the Fiscal Agent Agreement, dated as of July I, 2012, by and between the City and the Fiscal Agent, relating to the Bonds.

IN WITNESS WHEREOF, the undersigned has caused this Certificate to be executed by its authorized representative on the date first written above.

12183 0019\1475593

CITY OF INDIO

By: ~~~--~--------------­Rob Rockwell Finance Director

Exhibit A (Certificate as to Specimen Bonds (AD 2002-1 Local Obligations))

Specimen Bonds

(see attached)

(

12183 0019\1475593

REGISTERED NO R-1

UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF RIVERSIDE

CITY OF INDIO ASSESSMENT DISTRICT NO. 2002-r> ,_ , :;'

LIMITED OBLIGATION REFUNDING IMPROVEMENT BOND

INTEREST RATE 4.69%

REGISTERED OWNER:

PRINCIPAL AMOUNT:

SERIES 2012 '

MATURITY DATE September 2, 2027

BOND DATE July 26, 2012

UNION BANK, N.A., AS .·TRUSTEE FOR THE INDIO FINANCE AUTHORITY

THREE MILLION FOUR HUNDRED TEN THOUSAND DOLLARS

Under and by' virtue of the Refunding Act of 1984 for 1915 Improvement Act Bonds, Division 11.5 ofthe California Street and Highways Code (the_"l984 Refunding Act") the City of Indio, County of Riverside, California (the "City"), will, out of the Redemption Fund for the payment of the Bonds issued upon· the unpaid reassessments made for the refunding and reassessment more f'\llly described in proceedings taken pursuant to Resolution No. 9535,

-adopted by the City Council of the City on May 16, 2012 (the "Resolution oflntention"), pay to the registered owner hereof, or registered assigns, on the maturity date stated above, the principal sum shown hereon in lawful money of the United States of America and in like manner will pay interest. at the rate per annum stated above, payable semiannually on March 2 and September 2 (each an "Interest Paymenf Date") in each year commencing on September 2, 2012. This Bond bears interest from the Interest Payment Date next preceding its date of authentication and registration, unless this Bond is authenticated and registered (i) on an Interest Payment Date, in which, event interest shall be payable from such date of authentication and registration, (ii) prior to an 'Interest Payment Date and after the close of business on the fifteenth (IS'h) day of the month immediately preceding such Interest Payment Date, in which event it shall bear interest from such Intere$t Payment Date, or (iii). prior to the close of business on the 15th day of the

',month immediately preceding the first Interest Payment Date, in which event it shall bear interest from the Bond Date stated above, until payment of such principal sum shall have been discharged; provided, however, that if at the time of authentication of such Bond, interest is in

-default,i)Jterest on that Bond shall be payable from the last Interest Payment Date to which the interest lias been paid or made available for payment. Both the principal hereof and redemption premium hereon are payable upon presentation and surrender hereof at the corporate trust office of Union Bank, N .A., or its successor, as Fiscal Agent (the "Fiscal Agent"), in Los Angeles, California, or such other place as may be designated by the Fiscal Agent and the interest hereon

1477061

is payable by check mailed, by first-class mail, to the owner hereof at such owner's address as it appears on the registration books of the Fiscal Agent of the fifteenth (15th) day of the""'mpnth immediately preceding each Interest Payment Date, or by wire transfer ma~e ,ott,t,!le lf\i~Nst Payment Date upon instructions of any owner of $500,000 or more in aggfegaie" princ'ipal amount of Bonds delivered to the Fiscal Agent prior to the fifteenth (15th) da/ofthe month immediately preceding the Interest Payment Date. :·. ''•:

'> /:/

This Bond will continue to bear interest after maturity at the'·i"ate abOve stated, provided that it is presented at maturity and payment thereof is refused upon:the soi~ groungJhat there are not sufficient moneys in the Redemption Fund with which to pay same/· If it is !lilt presented at maturity interest hereon will run only until maturity. · · /

\, . .· This Bond is one of several annual series of bonds: of like date, tenor and effect, but

differing in amounts, maturities and interest rates, issued by: the. City of Indio under the 1984 Refunding Act, Resolution No. 9539 of the City Council of the City,adopted on May 16, 2012 (the "Resolution of Issuance") and a Fiscal Agent.Agreem.enfdated as of July I, 2012 (the "Fiscal Agent Agreement") by and between the City' 11nd the Fiscal Agent in the aggregate principal amount of $3,410,000 for the purpose of providing means for the refunding and reassessment described in the proceedings, and is secured by the moneys in the Redemption Fund and by the unpaid reassessments made for the payment of the refunding and reassessment, and, including principal and interest, is payable exclusively out of the Redemption Fund and certain other funds and accounts as provided in the Fiscal Agent Agreement. The City will not obligate itself to advance available funds from the·City Treasury to cure any deficiency which may occur in the Redemption Fund •.

This Bond is subject to mandatory sinkfng fund redemption by Jot, at a redemption price equal to the principal amount thereof to be redeemed, without premium, on September 2 of each year (commencing September 2, 2012) in the aggregate respective principal amounts set forth in the Fiscal Agent Agreement, by giving at least 30 day's notice by registered or certified mail, postage prepaid, or by personal service to the registered owners' address as they appear on the registration books of the Fiscal Agent.

This Bond or any portion of it in the amount of one dollar ($1), or any integral multiple thereof, may be redeemed and paid in advance of maturity upon~March 2 or September 2 in any year by giving at least 30 days' notice by registered or certified mail, postage Prepaid, or by personal' service to the registered owner hereof at the registered owner's address as it appears on the registration• books of the Fiscal Agent at the following' redemption prices expressed as percentages ·o,t' the principal amount of the Bonds to be redeemed together with interest accrued to the date of redemption:

Redemption Dates

Priorto September 2, 2017 September 2, 20 17 and thereafter

Redemption Prices

103% 100

· This Bond is subject to refunding pursuant to the procedure of Division II (commencing with Section 9000) or Division 11.5 (commencing with Section 9500) of the Streets and Highways Code of the State of California prior to maturity.

2 147706\

This Bond is transferable by the registered owner hereof, in person or by th~ owner's attorney duly authorized in- writing, at the office of the Fiscal Agent, subject to the tenns,,and conditions provided in the Fiscal Agent Agreement including the payment of certa]It~hargesj;;if any, upon surrender and cancellation of this Bond. Upon transfer, a new registenid' Bofid'<it Bonds, of any authorized denomination or denominations, of the same maturity, a·rid{!!~ the same aggregate principal amount, will be issued to the transferee in exchange_ t!terefor. '·'~; •.

:;(.

Bonds not owned by and registered in the name of the lndig,Finance Authority shall be registered only in the name of an individual (including joint ownersj, a corpbration, .a partnership or a trust. · · \ :;/ . ::·;

Neither the City nor the Fiscal Agent shall be required to exchange· ·or to register the transfer of Bonds during the fifteen days immediately preceding any interest payment date or of any Bonds selected for redemption in advance of maturity. · · .. · ·

The City and the Fiscal Agent may treat the oWIIer her~of ~;:the absolute owner for all purposes, and the City and the Fiscal Agent shall notbe'affected by any notice to the contrary.

This Bond shall not be entitled to any benefit J~der the 1984 Refunding Act, the Resolution of Issuance or the Fiscal Agent Agreement, or become valid or obligatory for any purpose, until the certificate of authentication and registration hereon endorsed shall have been dated and manually signed by the Fiscal Agent. · ·

IN WITNESS WHEREOF; the City .of Indio has caused the Bond to be signed and attested by the facsimile signatures of the City Treasurer and the City Clerk, all on the Bond Date above.

1477061

CITY OF INDIO

~,~MEN .,....-:.m~

3

CERTIFICATE OF AUTHENTICATION AND REGISTRATION '4'

This is one of the Bonds described in the within mentioned which has been authenticated and registered on July 26, 2012.

Fiscal Agent. Agre=etrlent ....;:;-;_~, " '..::,: k' ," ',,;,''"-:.:;:·

' '•f;··, ''\ ~\

UNION BANK, N.A., as Fiscal Agent .··. ·

. ~. By: ___ ___;.''";-··-:-+'-:--:-:----:-:-.. '--' ----

AuthoriZed Sigriatory ... ===========================================-7-=======================

ASSIGNMENT

For value received, the undersigned do(es) h~reby sell, ~.~ign and transfer unto

the within-mentioned Bond and ' hereby irrevocably constitute(s) and appoint(s)

---,--....,------:----:--:----:---:::--:----:--:----:---:-:--::-:-:-----:--:-attorney, to transfer the same on the books kept for registration hereof with full power of substitution in the premises.

Dated: _______ , 20_

. '.

1477061 4

NOTICE: The signature to this assignment must correspond with the name as it appears upon the within Bond in every particular, without alteration or enlargement or any change whatsoever .

"< '•·

''' ,. '

'~: :! : ' ' ·-· l· " . ' ; ..

' .. , '

' .

! " '

' ' . ,.,

CERTIFICATE OF AUTHENTICATION AND REGISTRATION

This is one of th~ Bonds described in the within mentioned Fiscal Agent Agreement which has been authenticated and registered on July 26, 2012. ·.

i.JNION BANi( N.A., as Fiscal geni.

l_2LLl J lltClLL~ By: Authorized Signatory

ASSIGNMENT .

For value received, the undersigned .do(es) hereby sell, assign and transfer unto

the within-mentioned Bond and· hereby . irrevocably constituti:(s) and appoint(s)

----~--~--~--~~--~~~~--~~--~--~77~~----~~·attomey, to transfer the same on the books kept for registration hereof with full po'?{er. of substitution in the premises.

Dated: ______ , 20_

1477061 4

NOTICE: The signature to this assignment must correspond with the name as it appears upon the within Bond in . every particular, without alteration or enlargement or any change whatsoever.